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Citation: 2003TCC351
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Date: 20030520
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Docket: 2002-1547(IT)I
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2002-1548(IT)I
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BETWEEN:
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TIMOTHY FOX,
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BRIAN RICHARDSON,
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Appellants,
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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
Angers, J.T.C.C.
[1] These appeals were heard on common
evidence. The appellants appealed a taxable benefit that was
assessed against them by the Minister of National Revenue
(the "Minister") for both the 1998 and 1999
taxation years as a result of their employment with Juniper
Lumber Ltd. ("Juniper") and their use of a
company-owned GMC half-ton pickup.
[2] Both appellants were at all
material times employed by Juniper as forest technicians. Juniper
provided the appellant Timothy Fox with a GMC pickup truck
during both of the years in question. The pickup was used by him
to travel from his residence to the offices of Juniper, a
distance of approximately 70 kilometres one way. The other
appellant, Brian Richardson, travelled with him to and from
Juniper's offices approximately 95% of the time.
Brian Richardson also had the use of a pickup truck but that
vehicle was kept at Juniper's offices.
[3] Both appellants testified that
they had never used these vehicles for personal purposes.
Although one truck was used by them to travel from their
residences to Juniper's offices, they also used it for
picking up and delivering parcels or various parts for Juniper
and for visiting different work sites before going to
Juniper's offices. Neither appellant was required by Juniper
to keep a logbook of these activities. It was therefore difficult
for them to establish with any accuracy how many times a week
they were required to run such errands for Juniper on their way
to work. While most did not take them out of their way, others
did.
[4] The pickup in question used by the
appellants carried firefighting equipment and various other
pieces of equipment necessary for their work. The appellant
Timothy Fox testified that it was required that he be on
call in case of emergencies and that he run errands for Juniper.
It would have been impossible to provide these services with his
own vehicle. The area he had to cover for Juniper was vast and
most of it had to be travelled on logging roads. The pickup was
also equipped with a two-way radio, which meant that he
received instructions from Juniper as he operated the truck. Both
appellants were also called upon to respond to forest fires two
or three times a year.
[5] Although the aforementioned
errands were not part of their work as forest technicians, both
appellants felt that their responsibilities as employees included
running these errands and executing requests by Juniper to
respond to forest fires or other emergencies that may have
occurred. Both also felt that they would have been fired had they
not done as they were asked. Juniper's policy on the use of
company vehicles prohibited employees from using them for
personal purposes unless approval was obtained. Personal use was
considered an exception and was not the rule.
[6] The Minister assessed both
appellants under paragraph 6(1)(a) of the Income
Tax Act ("Act"), which reads as follows:
(a) Value
of benefits - the value of board, lodging and other benefits
of any kind whatever received or enjoyed by the taxpayer in the
year in respect of, in the course of, or by virtue of an office
or employment, except any benefit
(i) derived
from the contributions of the taxpayer's employer to or under
a registered pension plan, group sickness or accident insurance
plan, private health services plan, supplementary unemployment
benefit plan, deferred profit sharing plan or group term life
insurance policy,
(ii) under a retirement
compensation arrangement, an employee benefit plan or an employee
trust,
(iii) that was a benefit
in respect of the use of an automobile,
(iv) derived from
counselling services in respect of
(A) the mental or physical
health of the taxpayer or an individual related to the taxpayer,
other than a benefit attributable to an outlay or expense to
which paragraph 18(1)(l) applies, or
(B) the re-employment or
retirement of the taxpayer, or
(v) under a salary
deferral arrangement, except to the extent that the benefit is
included under this paragraph because of subsection (11).
[7] As stated, the vehicles concerned
in these appeals were pickup trucks, for they could not seat more
than two passengers. They were not automobiles as defined in s.
248(1) of the Act. In assessing the appellants, the Minister made
no distinction between them based on who actually had the pickup
in his possession and who was simply a passenger. The Minister
allocated the personal travel equally between the two and reduced
the distance travelled to and from their work to 24,000
kilometers for each taxation year. The rates used by the Minister
are found in section 7306 of the Income Tax
Regulations.
[8] The question is whether the
appellants received or enjoyed in respect of, in the course of,
or by virtue of their employment a benefit in the form of driving
or travelling in a company vehicle to and from their work during
both the 1998 and 1999 taxation years.
[9] Although no representative of
Juniper testified at the trial, it is evident from the
company's policy on the use of its vehicles that it did not
consider travelling back and forth from home to work by its
employees as personal use of the vehicles. I can only assume that
the intended purpose of such use of those vehicles by
Juniper's employees was to serve Juniper's needs. Travel
between home and work is a personal expense, but if an employer
requires that employees be on duty to meet its needs, whether
these have to do with forest fires or with running simple errands
that may or may not take these employees out of their way, it
seems to me that the employees are in such instances on duty all
the time and, more specifically, from the moment they get into
the company's vehicle (here, pickup truck).
[10] The evidence clearly indicates that
when the appellants drove to work, they were at Juniper's
disposal. The pickup trucks were equipped with two-way radios,
firefighting equipment and various parts needed for Juniper's
operations. The appellants were also asked to carry other
passengers to various places. As well, company pickups were used
because the appellants travelled on logging roads and covered a
vast area.
[11] Counsel for the respondent referred to
Rioux v. Canada, [2002] T.C.J. No. 54 (2002
DTC 1357, French), a case in which Judge Tardif of this Court
stated that it is not enough that one accommodate one's
employer by running a few errands in one's daily travel to
make it travel for business purposes. I believe that the fact
situation in this appeal is different as the appellants were on
call to respond to any emergencies and had to be available for
their employer every day. Our fact situation is more similar to
that in Anderson et al. v. The Queen, 2002 DTC 1876. In
that case, the appellants were employed by a gas company and were
required to take home at the end of each workday company pickup
trucks used by them for their work. Those trucks were outfitted
with tools and equipment related to the appellants' jobs. The
appellants were on call when they drove to work and were subject
to being called for emergencies. Judge Beaubier stated at
paragraph 16:
. . . Once in the vehicle, the employees were on the job: they
were in the employers' premises and business place and could
be called there on the employers' radio in the vehicle and
directed to go anywhere their employer desired . . . .
[12] Counsel for the respondent argued that
the appellants were hired as forest technicians and not as
delivery persons and thus deliveries were not part of their
duties. The appellants on the other hand believed strongly that
deliveries were part of their duties and felt that they would
have been fired had they refused such errands. I accept the
appellants' position and their belief in this regard. I also
accept that, once in their vehicle, they were under the control
of Juniper. Accordingly, I find that the appellants, when they
left home to go to work, were acting in the performance of their
duties, as they were required to respond to their employer's
directions while driving to work. The benefit was entirely
Juniper's and not the appellant's.
[13] For these reasons, the appeals are
allowed.
Signed at Ottawa, Canada, this 20th day of May 2003.
J.T.C.C.
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