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Citation: 2004TCC420
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Date: 20040614
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Docket: 2004-763(IT)I
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BETWEEN:
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JOSEPH GERALD SULLIVAN,
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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 pursuant to the
Informal Procedure was heard at Kamloops, British Columbia, on
June 1, 2004, respecting the Appellant's 2001 and 2002
taxation years. The purported appeals for the 1996 - 2000 years
are quashed. The Appellant was the only witness.
[2] Paragraphs 2 to 13 inclusive of
the Reply to the Notice of Appeal describes the particulars in
dispute. They read:
2. In respect
of the whole Notice of Appeal, he admits that the Appellant's
daughter Amanda Sullivan ("Amanda") was diagnosed in
1996 with Type 1 Insulin Dependant Diabetes (the
"Impairment").
3. He has no
knowledge of and puts in issue all the other allegations of fact
contained in the Notice of Appeal.
4. In filing
his Returns of Income for the 2001 and 2002 taxation years, the
Appellant did not claim the Disability Tax Credit (the
"Credit") in respect of Amanda.
5. The
Minister of National Revenue (the "Minister") initially
assessed the Appellant for the 2001 and 2002 taxation years on
March 14, 2002 and March 6, 2003, respectively, as filed.
6. On February
7, 2003, a T1 adjustment request was received from the Appellant
requesting that the Credit be allowed in respect of Amanda for
the 1996 taxation year to the present. The Appellant attached a
Certificate completed by a medical doctor indicating that Amanda
was markedly restricted in a basic activity of daily living,
specifically eating, as she required parental supervision of diet
and insulin dosing and that she has been markedly restricted
since June, 1996.
7. The
Minister did not reassess the Appellant to allow the Credit for
any taxation year and advised the Appellant by way of letter
dated July 9, 2003 that the Credit was not being allowed because
the matter had been referred to medical advisors in Ottawa
Headquarters and that there was no indication that Amanda was
markedly restricted in a basic activity of daily living or that
she met the eligibility criteria under life-sustaining therapy as
defined in the Act. For purposes of the Credit,
life-sustaining therapy does not include special programs of diet
or medication such as insulin.
8. The
Appellant filed a Notice of Objection for the 1996 to 2002
taxation years. The Minster advised the Appellant by way of a
letter dated August 12,2003 that only the objection for the 2002
taxation year had been filed on time. An extension of time to
file an objection for the 2001 taxation year was granted,
however, the objections for the 1996 to 2000 taxation years were
not made within one year of the time otherwise provided for
filing a Notice of Objection and therefore no time extension
could be granted for those years.
9. The
Minister confirmed the assessments for 2001 and 2002 taxation
years as pursuant to subsection 118.3(1) of the Income Tax
Act ("Act") Amanda was not an individual who
has a severe and prolonged mental or physical impairment, where
the effects of the impairment are such that the individual's
ability to perform a basic activity of daily living is markedly
restricted or would be markedly restricted but for therapy
that
(i) is
essential to sustain a vital function of the individual,
(ii) is required to
be administered at least three times each week for a total
duration averaging not less than 14 hours per week, and
(iii) cannot reasonably be
expected to be of significant benefit to persons who are not so
impaired.
Therefore, the Appellant is not entitled to a Credit under
subsection 118.3(2) of the Act.
10. In so confirming the
assessments for the 2001 and 2002 taxation years, the Minister
assumed the following facts:
a)
Amanda's date of birth is August 21, 1994;
b) Amanda was
diagnosed with the Impairment in June, 1996;
c) The
Impairment does not cause Amanda to be markedly restricted in her
basic activities of daily living; and
d) Amanda does
not require life sustaining therapy for the Impairment..
B. ISSUES
TO BE DECIDED
10. The issue is whether
the Appellant is entitled to the Credit in respect of Amanda for
the 2001 and 2002 taxation years.
C.
STATUTORY PROVISIONS RELIED ON
11. He submits that since
no Notices of Objection were filed in respect of the 1996 to 2000
taxation years within the time prescribed by section 165 of the
Act and as required by subsection 169(1) of the Act, this
Honourable Court lacks jurisdiction to consider this appeal as it
relates to those years and the appeal as it relates to those
years should be dismissed.
12. He relies on sections
118.3, 118.4, 165 and 169 of the Act, as amended for the
2001 and 2002 taxation years.
D.
GROUNDS RELIED ON AND RELIEF SOUGHT
13. He submits that since
Amanda was not markedly restricted in any of her activities of
daily living, she is not entitled to the Credit in the 2001 and
2002 taxation years pursuant to subsection 118.3(1) and section
118.4 of the Act and therefore, the Appellant is not
entitled to the Credit in respect of her in those years pursuant
to subsection 118.3(2) of the Act.
[3] Assumptions 10 a) and b) were not
refuted by the evidence.
[4] Exhibit R-1 is the physician's
report form respecting Amanda. The following two particulars in
it are important:
1.
§ Can
your patient feed or dress himself or herself?
Answer no only if, all or almost all the time even with
therapy, medication, or advice, your patient cannot feed or dress
himself or herself, or he or she takes an inordinate amount of
time to do
so.................................................Feeding
yes [ ] no
[X]
Dressing yes [X]
no [ ]
...
2.
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Life-sustaining therapy (applies to 2000 and
later years)
If your patient needs life-sustaining therapy to support
a vital function (see page 1), he or she may qualify for
the disability amount, even if the therapy has alleviated
the condition. Your patient must specifically dedicate the
time needed for this therapy - at least three times per
week, to an average of at least 14 hours per week (do not
include time needed for travel, medical appointments, or to
recuperate after therapy).
Does your patient meet these conditions for
life-sustaining therapy?
yes [ ] no [X]
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The concept in 2 above is taken from paragraph
118.3(1)(a.1)(i). Subsection 118.3 (a.1) reads:
118.3 (1) Credit for mental or physical impairment -
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 or would be markedly restricted but
for therapy that
(i) is essential to sustain a vital function of the
individual,
(ii) is required to be administered at least three times each
week for a total duration averaging not less than 14 hours a
week, and ...
The word "therapy" is defined in The Concise Oxford
Dictionary, 8th Edition, 1990, to mean:
1 The treatment of physical or mental disorders, other
than by surgery, 2 a particular type of such treatment.
[5] The evidence given by Mr. Sullivan
to the Court is completely credible. He contradicted the
quotation in paragraph [4] 2. The reasons for this are
two-fold:
1. The doctor had no
personal knowledge of the time required.
2. The word
"therapy" may be interpreted by the doctor as
describing professional medical intervention. In fact,
Amanda's parents provided "therapy" to Amanda much
more than three times per week and fourteen hours per week. They
tested her blood sugar six to eight times per day in 2001 and
2002. They also supervised all of her feeding during these years
when she was six to eight years old. Snacks had to be monitored.
If Amanda went to a birthday party, she had to sit there while
the other children ate their food and then she brought her cake
and candy home for her parents to check their carbohydrate levels
before she could eat any of it. This applies to all snacks and
treats and three meals per day, seven days per week in addition
to the insulin tests and treatments. All of this is therapy in
the Court's view, and required more than fourteen hours per
week from each of Amanda and her parents. This is especially so
respecting a six to eight year old who is going to school, to
other children's homes, and who is therefore in and out of
her home and yet, in Amanda's and most cases, does not yet
understand or know how to monitor carbohydrate levels, or her
blood sugar levels, or her insulin. Thus, the Court finds Exhibit
R-1, to have an incorrect answer to this question. The answer
should be "yes".
[6] Moreover "feeding"
includes meals, snacks and treats. It includes all intake of food
which, given Amanda's need upon receiving her food to wait at
a table before imbibing food (and without including Amanda's
time spent after a meal at another's home and taking her
treats home) for her parents to monitor what she might eat at any
time, required an inordinate amount of time to feed herself. From
Mr. Sullivan's testimony, that inordinate amount of time
occurred in both 2001 and 2002 for Amanda.
[7] The therapy described herein was
life-sustaining for Amanda. Without it, she would have gone into
a coma and died. Moreover the diabetes markedly restricted
Amanda's activities in feeding herself.
[8] These findings apply to Amanda
and, generally, to a child who is her age and, for the first
time, beginning school and going to other children's homes.
The therapeutic supervision and therapy for such a child with
diabetes is constant and is life-supporting. It was so in
Amanda's case.
[9] The appeal is allowed. This matter
is referred to the Minister of National Revenue for
reconsideration and reassessment accordingly. The Appellant is
awarded the sum of $100 on account of out-of-pocket disbursements
incurred in prosecuting this appeal.
Signed at Calgary, Alberta, this 14th day of June 2004.
Beaubier, J.
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