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Citation: 2004TCC334
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Date: 20040503
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Docket: 2000-2150(IT)I
2001-895(IT)I
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BETWEEN:
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ANNE STITSON,
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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
Sarchuk J.
[1] These are appeals by Anne Stitson
from assessments with respect to the 1997 and 1998 taxation years
in which the Minister of National Revenue denied her claims with
respect to the transfer of the amount for mental or physical
impairment from her daughter, Jacqueline, in computing the
non-refundable tax credits and tax payable for those taxation
years.
[2] Jacqueline was born on January 19,
1986. At the age of five, she was diagnosed as having Type 1
insulin dependent diabetes (mellitus diabetes). As a result, it
became necessary for the Appellant to learn how to give
injections, measure out insulin and check for glucose levels. She
was taught how glucose levels can be affected by what is ingested
and how to spot low glucose levels. In order to manage
Jacqueline's diabetes, their daily regimen changed and a
routine was implemented which required Jacqueline to eat every
two to two and one-half hours, and having a blood test to
determine the blood sugar levels before every meal and at
bedtime. The Appellant testified that Jacqueline's blood
sugar levels always needed to stay between 5 and 10. Below 5
would result in a "low" and above 10 would result in a
"high". In the instance of low blood sugars, foods such
as carbohydrates, Pepsi or orange juice had to be ingested
immediately. A too high reaction was treated with insulin or
exercise to burn off the sugar and no food. The testing involved
pricking Jacqueline's finger, collecting the drop of blood on
a strip and inserting the strip into the blood machine which
provided a reading of sugar levels in the blood. Generally, this
testing would be performed three to four times a day. The entire
regime of blood testing and food preparation took approximately
two to three hours a day, but more time would be required when
the blood levels fluctuated. The Appellant testified that for a
period of six to seven months, Jacqueline had continuous blood
sugar lows and as a result, it was necessary on a number of
occasions to bring her home from school. In 1997 and 1998, when
Jacqueline was 11 and 12 years old, the lows and highs were
experienced at least three to four times a week.
[3] During the early stages of
Jacqueline's diabetes, the Appellant was taught how to slowly
increase insulin if at the time of testing, blood sugars had
increased. As well, there are different types of insulin and a
diabetic can be on a "one type" or "two
mixed". In the years in issue, Jacqueline had three to four
mixed insulin injections a day. According to the Appellant,
Jacqueline was unable to do these tests, she was unable to mix
the two types of insulin, did not know how much to inject, and
was unable to inject the insulin herself. The Appellant further
noted that a diabetic that eats 40 carbohydrates would be using
10 units of insulin to balance out these carbohydrates since
carbohydrates and insulin always have to balance in order that
sugar levels of a diabetic are kept as level as possible. In 1997
to 1998, Jacqueline could not control her own diet. She did not
understand the use of carbohydrates albeit she knew that certain
predetermined foods had to be consumed by her as scheduled
snacks. According to the Appellant, the effect of an improper
diet causes sugar levels to go up and down and can cause lows and
highs to set in without any symptoms. When this happens and
symptoms go undetected the child can become unconscious, have
seizures and/or go into a coma. Jacqueline was taken to the
hospital by ambulance twice because of low blood sugars, once
barely conscious and the second time following a seizure and
unconscious. On both occasions, her food had been monitored and
she had been given insulin injections. In the case of a
severe episode a drug called Glucagon (liquid sugar glucose) is
injected. It is injected when the child is unconscious or almost
unconscious. Jacqueline was injected with Glucagon once.
[4] During the taxation years in
issue, Jacqueline was seen by two doctors at the Hornepayne
Community Hospital, Dr. Kuntz (now deceased) and Dr. Manuela
Joannou. The Appellant's testimony is that the latter would
probably have seen Jacqueline once or twice a month, although Dr.
Kuntz was the family doctor. The Appellant produced and filed a
disability tax credit certificate[1] dated May 12, 1999. It had been completed and
signed by Dr. Joannou. In completing this certificate,
Joannou indicated that the impairment was Type 1 (juvenile onset,
insulin dependent) diabetes. In responding to question 9 which
reads:
Is the impairment severe enough to restrict the basic activity
of daily living identified above, all, or almost all, the time,
even with therapy and the use of appropriate aids and
medication?
the doctor stated "No". A second disability tax
credit certificate was filed with the Court by counsel for the
Respondent.[2] It
related to disability tax credit claims for the 1992 and 1993
taxation years. This certificate was signed by Dr. B. Hattersley
on April 11, 1994. He responded "No" to Question 12
which reads:
Having read the information on this form, in your opinion, has
your patient a prolonged impairment that is severe enough to
markedly restrict all or almost all of the time, his or her
ability to perform one or more basic activities of daily living,
even with the use of appropriate aids, medication, or therapy,
for the years claimed?
The Appellant testified that notwithstanding this certificate,
her claim for the credit was allowed in those two years.
[5] It is the Appellant's position
that although Jacqueline could eat her meals without help, she
could not feed herself in the two taxation years in issue because
she could not properly prepare the meals she was required to
have. She maintained that Jacqueline did not know enough to eat
the proper food and when it was necessary to do so. In her case,
eating the wrong food would cause the diabetes to get out of
control and would have serious consequences. Thus, she maintains,
Jacqueline meets the requirements set out in subparagraph
118.4(1)(ii) of the Act.
[6] In his submissions, counsel for
the Appellant made reference to two decisions: Tammi v.
Canada,[3] and Mantle v. Canada[4] in each of which the factual
situations were somewhat similar. In Tammi, the
Appellant's three year old son and in Mantle, the
Appellant's nine year old child suffered from juvenile
diabetes. In those cases, the appeals were allowed
notwithstanding the absence of a positive certificate. Counsel
for the Appellant argues that no distinction can be drawn between
the facts in those cases and in the present appeals. From that
standpoint there is little dispute. However, in each of those two
cases there was additional evidence before the Court which is not
the case here. In Tammi, the doctor added a handwritten
note "needs assistance due to age" to his negative
response to the question "Can your patient feed or dress
himself or herself?". In Mantle, the medical report
submitted under the provisions of subparagraph
118.3(1)(a)(ii) was not supportive and answered the
pertinent questions pertaining to the severity of the
Appellant's disease in the negative. However, the presiding
judge also had before her an exhibit indicating a change of heart
by the same physician and a letter from him attached to the
Notice of Appeal where he acknowledged that a child would be
unable to perform any of his/her basic daily activities if proper
doses of insulin were not administered at the proper time. Thus,
in these two cases, the original negative certificates were
qualified by the subsequent evidence provided in one form or
another by the doctor who attended to that patient and had
authored the certificate.
[7] In Attorney General of Canada
v. Buchanan et al,[5] the Federal Court of Appeal recently reviewed the
circumstances in which a Court is entitled to consider a negative
certificate. In that case, the doctor signing the certificate had
indicated that the Appellant was markedly restricted in his
mental function but also noted that the disability was not severe
enough to restrict his daily living activities. At trial, the
psychiatrist testified as to the inconsistencies in the
certificate and said that he understood that the proper response
depended on whether the patient was severely limited in his
ability to perform normal daily activities such as hygiene care,
normal conversations and getting dressed. The Federal Court held
that the trial judge had correctly determined that the
psychiatrist had misapprehended the relevant provisions of the
Act when completing the certificate and that in such
circumstances, it was open to the trial judge to decide that the
certificate, but for this error, would have been a positive
certificate under the Act. In the course of his Judgment,
Rothstein J.A. made the following comments:
14 The Income Tax
Act places a burden on a physician when completing the
certificate described in paragraph 118.3(1)(a.2), to have
regard to what constitutes a marked restriction in the
performance of a basic activity in daily living, as defined in
paragraph 118.4(1)(c). This does involve an
interpretation of law. Nonetheless, the certificate must be
completed by a physician (or a psychologist, in the case of a
mental disorder) and if the physician misinterprets the
requirements of the Act, errors in completing the
certificate may occur.
15 In the present
case, it is apparent that the Tax Court Judge was correct in
concluding that the psychiatrist misinterpreted paragraph
118.4(1)(c) and applied the wrong legal test of a basic
activity of daily living in completing the certificate.
16 The question then
is, what remedy is there for a taxpayer who obtains a negative
certificate incorrectly completed by his or her physician because
the physician is under a misapprehension as to the legal test of
a basic activity of daily living.
...
18 In an appropriate
case, the taxpayer may seek relief in the Tax
Court. Proceedings in the Tax Court are not a judicial
review of the correctness or reasonableness of the Minister's
assessment. Rather, the function of the Tax Court is
to arrive at the correct assessment itself (unless it is unable
to do so and considers it necessary to refer the assessment back
to the Minister for reconsideration under subparagraph
171(1)(b)(iii) of the Income Tax
Act). The Tax Court's consideration of the
matter will be on the basis of the evidence adduced in the Tax
Court, even if that evidence was not before the Minister when he
made his assessment. See Johnston v. Minister of
National Revenue, [1948], 3 DTC 1182 at 1183 per Rand, J.
Therefore, the fact that the Minister based his assessment on a
negative medical certificate is not conclusive.
19 The difficulty is
that a positive medical certificate is a condition precedent to
the Minister granting a disability tax credit. As the positive
medical certificate is a mandatory requirement of the Act,
I do not think it is open to a Tax Court Judge to ignore that
requirement and simply substitute his or her opinion for that of
a medical practitioner. It seems to me that a number
of alternatives present themselves.
20 First, there is
authority for the proposition that a certificate can be corrected
through viva voce evidence. In R. v.
Bykowski (1980), 23 A.R. 426 (C.A.), leave to appeal to
S.C.C. refused, McDermid J.A. stated at page 430:
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In my opinion, the certificate could be so corrected, if
such was necessary, by the evidence of a constable who was
present when the samples were taken.
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See also R. v. Ryden (1993), 145 A.R. 194 at 198 (C.A.)
and R. v. Ziemers (1994), 132 N.S.R. (2d) 147 at 149
(C.A.).
21 Bykowski was a
straightforward case of a simple documentary error being
corrected in evidence. Thus, if a physician, in giving evidence
in the Tax Court, agrees to correct a certificate, I think that
is compliance with the requirement for a positive certificate
under paragraph 118.3(1)(a.2). The Minister here concedes
that, in the case of a simple straightforward error, a physician
could correct a certificate through viva voce evidence. I
think it also follows that if a different physician gave evidence
that convinced the Tax Court Judge that a positive certificate
should have been given by the original physician, it would be
open to the Judge to so find. This is because the finding is
based on medical evidence. In either case, the Judge would remit
the matter to the Minister with a direction to reassess on the
basis of a positive certificate.
22 At the other end
of the spectrum would be the case of a taxpayer appealing a
disallowance of a disability tax credit on the basis of a
negative medical certificate where the taxpayer is simply
dissatisfied with the medical judgment of the physician who
completed the certificate. In the absence of
conflicting testimony from another physician, it is difficult to
envision a case in which the Tax Court Judge, in these
circumstances, could find that a negative certificate should be
treated as a positive certificate. In this type of case, it would
seem that if the Tax Court Judge was doubtful as to the
correctness of the negative certificate, at most, the recourse
would be to remit the matter to the Minister for reassessment on
the basis that the taxpayer file a new positive certificate, if
one could be obtained.
23 The appeal at bar
falls between the two extremes. Here, there is a finding that in
completing the negative certificate, the psychiatrist made a
legal error. In this type of case, the question will
be whether, with the Judge applying the correct legal test (or
where bias is found, with the Judge exercising impartial
judgment), it is apparent that the physician would have issued a
positive certificate, or whether there is still room for medical
judgment to be exercised as to whether the certificate should be
positive or negative. In the former case, I think it
is open to the Tax Court Judge to find that the certificate
should be treated as positive and to remit the matter to the
Minister for reassessment on that basis. In the
latter, absent medical evidence of the kind referred to in
paragraph 20 above, I think the recourse must be to dismiss the
appeal or remit the matter to the Minister for reassessment on
the basis of the taxpayer filing a new positive certificate if
one can be obtained.
24 I am not
unmindful that the obtaining of a positive medical certificate in
these circumstances may be difficult or, indeed, in some cases,
impracticable. Individuals with disabilities so severe that they
may be entitled to a disability tax credit, may well be under the
long-term care of a specialist. As counsel explained, finding
another specialist may be difficult, and asking for even a
temporary transfer of records simply to obtain a positive medical
certificate from another doctor, may well disrupt the
relationship between the original physician and the taxpayer.
Further, it is certainly arguable that it is contrary to the
public interest to encourage "doctor shopping" by
patients.
[8] In the matter before me, the only
evidence is that of the mother who was the caregiver for this
child in the two taxation years in issue. There is no dispute
that it was necessary for her to ensure that the carbohydrates
were counted and that the insulin was balanced with the
carbohydrates, etc. and that all of the necessary functions could
not be left to an 11 or 12 year old. Her counsel argued,
primarily on the basis of the Tammi and Mantle
judgments, that with particular regard to the items listed, i.e.
the ability to feed, the ability to dress, the ability to speak,
etc. this Court has the right to determine, based on the
mother's testimony alone that the negative certificate was
inaccurate and incorrect. The answer to counsel's submission
is found in the language used by Rothstein J.A. in
Buchanan, to wit:
25 However, 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. Where the Tax
Court Judge is unable to reach that conclusion, either the appeal
must be dismissed or the matter must be remitted to the Minister
with a direction to reassess, should the taxpayer provide a
positive certificate.
Emphasis added
[9] Accordingly, the appeals are
dismissed.
Signed at Ottawa, Canada, this 3rd day of May, 2004.
Sarchuk J.
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