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Citation: 2004TCC581
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Date: 20040827
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Docket: 2003-4393(IT)I
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BETWEEN:
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ANNE H. EDMOND,
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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
Bowman, A.C.J.
[1] This appeal is from an assessment
for the appellant's 2002 taxation year. It involves a claim to
deduct, in computing income for that year, moving expenses
totalling $32,070.
[2] The appellant is a registered
nurse and is married to a medical doctor, Edmond E. Edmond
who represented her at trial but did not testify.
[3] The appellant and her spouse
immigrated to Canada in May 1997. They bought a house in
Mississauga. In 1998, they sold that house and moved to Quesnel,
British Columbia where they bought another house.
[4] In August 1999, the appellant and
her three children moved from Quesnel, British Columbia to
Melbourne, Australia, where she worked as a nurse at
St. Vincent's and Mercy Hospital from
February 7, 2000 to June 30, 2000. Her spouse
continued to reside in the house in Quesnel. In August 2000, the
appellant moved back to Canada from Australia. She states in an
affidavit which she filed that her moving expenses from Quesnel
to Australia and back to Quesnel amounted to $16,571, evidently
in Australian dollars.
[5] Upon her return to Canada she and
her spouse and children moved to Surrey, British Columbia from
Quesnel where she started to work as a nurse.
[6] One of the problems in this case
is that the numbers put forward in court are not consistent with
the amounts claimed or allowed. Mrs. Edmond filed an
affidavit in which she set out the expenses that she says should
be treated as moving expenses in respect of an eligible
relocation.
5. Moving from Mississauga to Quesnel:
Receipts available
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*TRUCKING/SHIPPING COSTS
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$ 5,350.00
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Exhibit A
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*TRAVELLING EXPENSES-TOR.-QUESNEL 2 VEHICLES
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$ 3,280.00
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Simple Method
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4000 Km/2 vehicles driven/41C/KM
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*ACCOMODATION 2 NIGHTS ON THE ROAD
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$ 200.00
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Simple Method
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*Carl Edmond (deceased/Suicide Aug.10th 2002)
flying to Quesnel.
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$ 550.00
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NIL
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* REALESTATE COMM
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$ 14,437.00
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Exhibit B
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* LEGAL/Mississauga House
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$ 792.00
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Exhibit B
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* MISC.
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$
47.00
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Exhibit B
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* LEGAL/QUESNEL HOUSE
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$ 906.00
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Exhibit C
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Total Costs
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$ 25,562.00
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6. Moving from Quesnel to Australia and back to
Quesnel:
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*TRAVELLING EXPENSES-$6711.00X2 /AIRFARE
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$ 13,422.00
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Exhibit D
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* STORAGE/SHIPPING PERSONAL BELONGINGS
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$ 2,510.00
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Exhibit E
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* ACCOMODATION 5 days
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$
639.00
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Exhibit F
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Total Costs
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$ 16,571.00
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7. Moving from Quesnel to Surrey:
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*TRUCKING/SHIPPING COSTS
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$ 1,800.00
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receipt given to school
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* TRAVELLING EXPENSES 650 Km x 42c
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$ 273.00
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Simple Method
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* CAR RENTAL 14 D
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$ 700.00
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Nil/misplaced
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* MEALS - 5 persons for 5 days
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$
500.00
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Estimate
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Total Costs
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$ 3,273.00
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Total moving costs
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$ 45,406.00
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[7] In 2002, the appellant claimed
$25,714 as an allowable moving expense in her return of income
and, in a second moving expense deduction form for 2002, she
claimed $31,849 as opposed to $25,714. The discrepancy was not
explained. Also, the invoice which she put in evidence from
Elmwood Moving and Storage to support the amount of $4,350 is
dated June 26, 1998. Precisely the same invoice (it is
obvious from looking at it) is attached to her notice of
objection with the exception of the date which is shown as
August/00. What is so extraordinary about this is not only that
it is so obvious but also that the change in date does not assist
the appellant one iota. I asked to see the original invoice but
it was not produced.
[8] I can state my conclusions
fairly readily.
(a) The cost of moving from
Mississauga to Quesnel, which the appellant claimed was $25,562
and which may have amounted to something over $20,000, is not
deductible in any year because it was not in respect of an
"eligible relocation" which is defined as follows in
section 248 of the Income Tax Act:
"eligible relocation" means a relocation of a taxpayer
where
(a) the
relocation occurs to enable the taxpayer
(i) to carry on a business or to be employed at a location in
Canada (in section 62 and this subsection referred to as "the new
work location"), or
(ii) to be a student in full-time attendance enrolled in a
program at a post-secondary level at a location of a university,
college or other educational institution (in section 62 and
in this subsection referred to as "the new work location").
(b) both the residence at which the taxpayer
ordinarily resided before the relocation (in section 62 and this
subsection referred to as "the old residence") and the residence
at which the taxpayer ordinarily resided after the relocation (in
section 62 and this subsection referred to as "the new
residence") are in Canada, and
(c) the distance between the old
residence and the new work location is not less than 40
kilometres greater than the distance between the new residence
and the new work location
except that, in applying subsection 6(19) to (23) and section
62 in respect of a relocation of a taxpayer who is absent from
but resident in Canada, this definition shall be read without
reference to the words "in Canada" in subparagraph (a)(i),
and without reference to paragraph (b);
The reason for this conclusion is that the move was not to
enable the appellant to be "employed at a location in
Canada...". The appellant's evidence does not support the
conclusion that she moved to Quesnel to work there. It is clear
that she did not seek work in Quesnel even though there was a
shortage of nurses there.
(b) The appellant's contention that
the move to Quesnel from Mississauga, back to Australia, then
back to Quesnel and finally from Quesnel to Surrey was simply a
circuitous way of getting from Mississauga to Surrey with each
stop along the way simply a temporary way station or sojourn in
her extended odyssey from Ontario to Surrey. Dr. Edmond
relied upon my judgment in Ringham v. The Queen,
2000 DTC 2060. That judgment reads in part as follows
at p. 2061:
[10] The essential difference between the appellant and the
respondent is this: the respondent says that there were two
moves:
(i) from Tiffany Place to Robson Court;
(ii) from Robson Court to Harding Boulevard.
[11] According to the respondent the costs relating to the
sale of Tiffany Place are connected with the first move and that
does not qualify under subsection 62(1) because the distance from
the "old residence" (Tiffany Place) and the new work
location (Thornhill) is not 40 kilometres greater than the
distance from the "new residence" (Robson Place) to the
new work location.
[12] The appellant's position is that there was
realistically only one move - from Tiffany Place to Harding
Boulevard.
[13] I agree with the appellant. The respondent's position
does not take into account the unusual situation in which the
appellant found himself as the result of the delays in, and
ultimate abandonment of, the Budapest project. Robson Court was a
temporary pied-à-terre, a way-station. It was never
regarded by Mr. Ringham as his ordinary residence. He kept some
of his furnishings in storage and he did not unpack many of the
boxes which he stored at Robson Court. It is true he changed his
mailing address to Robson Court but I do not regard this as
determinative.
[14] It is not in my view realistic to say that he was
"ordinarily resident" at Robson Court. He was expecting
to move at any time to Budapest and kept himself in readiness for
that move. It would make about as much sense to say that he was
ordinarily resident in the Holiday Inn in Thornhill. He seems to
have spent more time there than at Robson Court.
[15] After all, it took Odysseus ten years to get home to
Ithaca from Troy, with numerous sojourns along the way. No one
would ever suggest that notwithstanding his protracted stay with
Circe on the island of Aeaea he was ever ordinarily resident
there.
[16] Counsel referred to the leading case of Thomson v.
Minister of National Revenue, [1946] C.T.C. 51 (S.C.C.). That
case has stood far over half a century as the ultimate authority
on the meaning of ordinarily resident. It does not however deal
with the situation where a person on his way from an old
residence to a new one is forced to stay temporarily but longer
than anticipated in a place that cannot realistically be regarded
as his ordinary residence.
[17] In this case there was only one move, from Tiffany Place
to Harding Boulevard, with a somewhat longer than anticipated
detour through Robson Court and that move was completed in
1997.
That is not the situation here. The move from Mississauga to
Quesnel was one move and Quesnel became her and her spouse's
ordinary residence. After all, they bought a home there - hardly
a mere pied-à-terre.
(c) If I had found that the moving
expenses from Mississauga to Quesnel in 1998 were in respect of
an eligible relocation, I would not have accepted the
respondent's contention that the latest year in which she could
claim the moving expenses was 1999. Subsection 62(1)
reads:
62.(1) - There may be deducted in computing a taxpayer's
income for a taxation year amounts paid by the taxpayer as or on
account of moving expenses incurred in respect of an eligible
relocation, to the extent that
(a) they were not paid on the
taxpayer's behalf in respect of, in the course of or because of,
the taxpayer's office or employment;
(b) they were not deductible because of this
section in computing the taxpayer's income for the preceding
taxation year;
(c) the total of those amounts
does not exceed
(i) in any case described in subparagraph (a)(i) of the
definition "eligible relocation" in subsection 248(1), the
taxpayer's income for the year from the taxpayer's employment at
a new work location or from carrying on the business at the new
work location, as the case may be, and
(ii) in any case described in subparagraph (a)(ii) of the
definition "eligible relocation" in subsection 248(1), the total
of amounts included in computing the taxpayer's income for the
year because of paragraphs 56(1)(n) and (o); and
(d) all reimbursements and allowances received by the
taxpayer in respect of those expenses are included in computing
the taxpayer's income.
[9] Obviously, the provision limits
the amount that can be claimed to the taxpayer's income for the
year from the employment at the new work location. The words "to
the extent that they were not deductible because of this section
in computing the taxpayer's income for the preceding
year..." do not, in my opinion, put a two-year
limitation on the deductibility of moving expenses. Assume that
an expense is incurred in year one but the taxpayer's income for
the new job is nil in that year and, say, is less than the moving
expenses in year two. Clearly, the balance is deductible in year
three when the income is sufficiently high. The amount deductible
in year three is the amount that was not deductible in year two
because of the limitation imposed by subsection 62(1). If
Parliament wishes to put a limitation on the period in which
expenses or losses can be carried forward or back it certainly
knows how to say so, as it does with great specificity in
section 111.
[10] The move from Quesnel to Surrey is
probably an eligible relocation. However, I do not think the
expenses have been proved, even using the somewhat less stringent
standards than those employed by the Canada Customs and Revenue
Agency, which usually requires receipts.
[11] The only witness was Mrs. Edmond
and she did not testify about the amounts. Dr. Edmond did
not testify under oath but he stated in oral argument that the
trucking or shipping costs of $1,800 were paid in cash and no
receipt was retained because it was given to the school, for what
reason I was not told. $1,800 is a large amount to pay in cash. I
have no reliable evidence of the payment of this expense.
[12] None of the amounts claimed for the
Quesnel to Surrey move have been adequately proved.
[13] The appeal is dismissed.
Signed at Ottawa, Canada, this 27th day of August
2004.
Bowman, A.C.J.
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