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Citation: 2005TCC113
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Date:20050210
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Docket: 2004-2248(IT)I
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BETWEEN:
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CLAIRE LISTER,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Beaubier, J.
[1] This appeal respecting the
taxation years 2001 - 2003 pursuant to the Informal Procedure was
heard at Kelowna, British Columbia, on January 24, 2005.
[2] The agent for the Appellant called
Claire's son-in-law, David Thomson, her physician,
Dr. Ronald Schriemer, M.D., and Barbara Goertzen, R.N., the
manager of resident services at Hawthorn Park, a "retirement
community" at Kelowna, British Columbia, where Claire resided
during the years in question. The Respondent called
Gary Buckburry, the general manager of Hawthorn Parkand
Joanne Siemens, the Respondent's appeals officer on the file.
[3] Paragraphs 4 to 10 inclusive of
the Amended Reply to the Amended Notice of Appeal set out the
matters in issue. They read:
4. In
computing taxes payable for the 2001, and 2002
and 2003 taxation years, the Appellant claimed medical
expenses of $21,270.00, and $20,912.00,
and $28,055.00, respectively.
5. The
Minister of National Revenue (the "Minister") initially assessed
the Appellant for the 2001, and 2002 and
2003 taxation years on April 29, 2002, and
April 29, 2003, and September 14, 2004,
respectively, as filed by the Appellant.
6. The
Minister reassessed the Appellant for the 2001, and
2002 and 2003 taxation years on February 21, 2003,
and September 5, 2003, and December 6,
2004, respectively, and reduced the medical
expenses to $515.00, and $470.00, and
$2,293.00, respectively, thereby disallowing amount of
$20,755.00, and $20,442.00
and$25,762.00, respectively.
7. In response
to a Notice of Objection filed by the Appellant, the Minister
reassessed the Appellant for the 2001, and 2002
and 2003 taxation years to allow medical expenses of
$10,000.00 in each year for attendant care pursuant to paragraph
118.2(2)(b.1) of the Income Tax Act ("Act") as well
as to allow Disability Tax Credits of $6,000.00,
and $6,180.00 and $6,279.00 ("Credits"),
respectively, pursuant to sections 118.3 and 118.4 of the Act. In
so reassessing, the Minister disallowed medical expenses of
$10,755.00, and $10,442.00 and $15,762.00
("Amounts") in the 2001, and 2002 and 2003
taxation years, respectively.
8. In so
reassessing the Appellant for the 2001, and 2002
and 2003 taxation years, the Minister relied on the
following assumptions of fact:
a) the Appellant suffers from
numerous medical conditions, affecting multiple organs and has
great difficulty with executive functioning;
b) the Appellant requires help
on an ongoing basis with taking her medication, planning and
preparing meals, personal care and mobility;
c) the Appellant's doctor
recommended that she live in an assisted living environment;
d) the Appellant went to live in
Hawthorn Park Retirement Community ("Hawthorn"), which is
operated by Diversicare Incorporated ("Diversicare");
e) at Hawthorn, there are three
levels of care available: licensed intermediate care, assisted
living and independent living;
f) the Appellant
lived in an apartment at Hawthorn in the assisted living
area;
g) the Appellant was provided
with nursing services as required, 24 hour emergency response,
monitoring of health care needs and a full recreation program at
a cost of $950.00 per month;
h) in addition, she received and
was charged extra each month for medication assistance,
housekeeping services and meals;
i) the Appellant
claimed medical expenses of $20,755.00, and
$20,422.00 and $25,762.00 in the 2001, and
2002 and 2003 taxation years, respectively, in respect of
amounts paid to Diversicare; and
j) the Amounts were
not paid in respect of medical expenses as described in
subsection 118.2(2) of the Income Tax Act (the
"Act").
B. ISSUES
TO BE DECIDED
9. The issue
is whether the Appellant is entitled to deduct the Amounts as
medical expenses in the 2001, and 2002 and
2003 taxation years.
C.
STATUTORY PROVISIONS RELIED ON
10. He relies on sections
118.2, 118.3 and 118.4 of the Act and on section 5700 of
the Income Tax Regulations ("Regulations"), as
amended for the 2001, and 2002 and 2003
taxation years.
[4] None of the assumptions were
refuted, but assumption 8 g) requires an addition in that
Hawthorn offers additional recreation programs for additional
fees.
[5] The issue between the parties
turns on paragraph 118.2(2)(e) of the Income Tax
Act ("Act") for the years in question. It reads in
English:
118.2(2) For the purposes of subsection (1), a medical
expense of an individual is an amount paid ...
(e) for the care, or the care and
training, at a school, institution or other place of the patient,
who has been certified by an appropriately qualified person to be
a person who, by reason of a physical or mental handicap,
requires the equipment, facilities or personnel specially
provided by that school, institution or other place for the care,
or the care and training, of individuals suffering from the
handicap suffered by the patient.
For certifications made after December 20, 2002 the
certification must be in writing.
The French version of paragraph 118.2(2)(e) reads:
118.2(2) Pour l'application du paragraphe (1), les
frais médicaux d'un particulier sont les frais
payés ...
e) pour le soin dans une école, une
institution ou un autre endroit -- ou le soin et la formation --
du particulier, de son époux ou conjoint de fait ou
d'une personne à charge visée à
l'alinéa a), qu'une personne habilitée
à cette fin atteste être quelqu'un qui, en
raison d'un handicap physique ou mental, a besoin
d'équipement, d'installations ou de personnel
spécialisés fournis par cette école ou
institution ou à cet autre endroit pour le soin -- ou le
soin et la formation -- de particuliers ayant un handicap
semblable au sien;
[6] Dr. Schriemer certified as to the
Appellant's care by a letter dated November 15, 2002
(Exhibit R-2) and his predecessor, Dr. J. Ervine had executed
Exhibit R-1, the Form F 2201 Disability Tax Credit Certificate on
April 15, 1997. Dr. Schriemer agreed with Exhibit R-1 in his
testimony. Exhibit R-1 certified that Claire Lister was unable to
(3) think, perceive and remember and (2) was unable to walk,
using an aid if necessary. Claire Lister was stated in Exhibit
R-2 to suffer from numerous medical conditions and "has great
difficulty with executive functioning". At the material times she
took 19 different medications, had to be supervised to take them
and could not walk with a walker more than about 30 feet at one
time. Her suite at Hawthorn has had any cooking facilities
removed from it because she might endanger herself with them; it
has an alarm pull to notify the staff if she is in difficulty;
and she wears an alarm pendant. She has fallen from time to time,
has had strokes, has a heart condition, is on blood thinners and
at all times could not read a clock and has required 24 hour
supervision and could function on her own with these aids and
conditions. Her daughter, Mrs. Thomson moved her from
Toronto to live with the Thomsons in Kelownabecause of these
problems, but the 24 hour problems were such that Mrs. Lister had
to move to Hawthorn and has remained there during the years in
question.
[7] The Court accepts Exhibits R-1 and
R-2 as certification and Dr. Schriemer's additional confirmation
in the witness box as further certification pursuant to paragraph
118.2(2)(e). The question is whether Mrs. Lister is "a
person who ... requires the ... facilities or personnel specially
provided by ... (Hawthorn) for the care ... of individuals
suffering from the handicap suffered by the patient", in the
words of (e).
[8] "Special" is defined by Black's
Law Dictionary, 6th edition as:
"Relating to or designating a species, kind, individual, thing
or sort; designed for a particular purpose; confined to a
particular purpose, object, person, or class. Unusual,
extraordinary."
[9] Mrs. Lister has contracted for and
received "Basic Care" of "Assisted Living" during the years in
question. But during 2004 she was raised to care levels 1 and 2
for a period of time. Mrs. Lister's Basic Care is a suite, her
contract is for 2 prepared meals each day in the Dining Room,
housekeeping with laundry service, a 24 emergency call system and
health monitoring with personal pendant service. There are other
necessary "ancillary services" for which she contracts and pays
extra. At all material times she has received "Assisted Living
Services" either from Hawthorn or from "Kelowna Personal Care
Services" for an extra charge of $135.00 per month. These include
supervision to take her medications 4 times per day and "puffer
assistance" and housekeeping services.
[10] Does Hawthorn provide the personnel and
is it a place that specially provides for the care of individuals
suffering from the handicap suffered by Mrs. Lister? Her handicap
includes an inability to walk any distance; mental disability,
including decision-making; and the combination of strokes, heart
problems and the need for 19 different medications, which include
blood thinners with consequent medical problems if she falls.
[11] The Shorter Oxford Dictionary describes
the adverb "specially" to refer to "in a degree or to an extent
beyond what is usual or customary; particularly; pre-eminently."
Paragraph (e) refers to the care "of individuals" in the
plural, but not "to individuals." The French version of
(e) respecting this aspect refers to
"spécialisés fournis" ... "de particuliers."
Thus, they are similar in this respect.
[12] Hawthorn does specially provide for the
care of Mrs. Lister's handicap. Her handicap is general: she
requires supervision, various forms of medical assistance, the
preparation and supply of meals and constant monitoring on a
24-hour basis - all under medical supervision for medical
reasons. All are specially designed for her degree of handicap
and need for care on account of her handicap which is the
consequence of a multitude of medical problems which cumulatively
have handicapped Mrs. Lister.
[13] Therefore the appeal is allowed and
this matter is referred back to the Minister for reconsideration
and reassessment on the basis that for each year:
1. The Disability Tax
Credits are disallowed.
2. The medical expenses
claimed are allowed in the amounts of:
2001
$21,270
2002
$20,912
2003
$28,055
[14] The Appellant is awarded her taxable
costs and disbursements in this appeal.
Signed at Calgary, Alberta, this 10th day of
February 2005.
Beaubier, J.
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