van Angeren v. The Queen, docket 2001-790-IT-I (Informal Procedure)

Date: 20010719

Docket: 2001-790-IT-I

BETWEEN:

PHILIP VAN ANGEREN,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Beaubier, J.T.C.C.

[1]            This appeal pursuant to the Informal Procedure was heard at Calgary, Alberta on June 22, 2001. The Appellant was the only witness.

[2]            Paragraph 7, 8 and 9 of the Reply to the Notice of Appeal read:

7.              The Appellant filed a Notice of Objection and the Minister further reassessed the Appellant on January 26, 2001 to delete the standby charge previously assessed and include a taxable benefit received from Hastings for use of the motor vehicle it provided to the Appellant in the amount of $1,087.

8.              In so reassessing the Appellant, the Minister made the following assumptions of fact:

(a)            the Appellant was not an employee of Hastings;

(b)            the Appellant was self employed and worked for Hastings;

(c)            Hastings provided the Appellant with a 4WD F150 Ford pickup truck (the "motor vehicle");

(d)            the Appellant had use of the motor vehicle to drive from his home to the work location and back home again;

(e)            the work location for Hastings was in Cranbrook BC;

(f)             the Appellant lived in Calgary AB;

(g)            in the 1998 Taxation Year the Appellant made 4 return trips to Cranbrook BC from his home in Calgary AB in the motor vehicle provided by Hastings;

(h)            each round trip to Cranbrook BC from Calgary AB was 750 kilometers for a total of 3000 kilometers in the 1998 Taxation Year;

(i)             the Appellant traveled [sic] an additional 107 personal kilometers in the 1998 Taxation Year;

(j)             the motor vehicle was provided at the Appellant's request;

(k)            the Appellant received income in the form of a benefit calculated on the basis that the Appellant traveled [sic] 3,107 personal kilometers at .35 cents per kilometer for a total benefit of $1,087;

(l)             the Appellant is required to pay arrears interest on the outstanding tax balance in accordance with section 161 of the Income Tax Act (the "Act").

B.             ISSUES TO BE DECIDED

9.              The issues are whether:

(i)             the Minister has correctly included a benefit in the Appellant's income in respect of a motor vehicle provided by Hastings;

(ii)            the Appellant is liable to pay arrears interest for the 1998 Taxation Year pursuant to section 161 of the Act.

[3]            Assumptions 8(d), (e), (g) and (i) must be amended because the Appellant's home in Calgary is also his business office. He is a privately practising geologist whose office is in his home. During the periods in question in 1998 his only contract was with "Hastings" - Hastings Management Corporation of Vancouver, British Columbia. The Appellant did his accounting and some map work for his geological practice in his office in Calgary. He also kept his practice's textbooks there. Assumption (j) is not correct; Hastings had retained the Appellant for work in the Yukon in 1997 and stored the motor vehicle outside of the Appellant's home office in Calgary over the 1997-98 winter. The alleged personal 107 kilometres occurred that winter when, on Hastings instructions, the Appellant started the truck occasionally and sometimes used it at those times to drive his children to school. Hastings had wanted the truck started during the winter to keep it in operating condition (as would anyone who knows about prairie winters). Assumption (k) is in dispute. The remaining assumptions are correct or are not in dispute.

[4]            The Appellant's contract with Hastings was that he billed a per diem fee and Hastings paid all expenses. When on site the work was seven days per week for 12 hours per day. Then four times during the contract he returned to Calgary for periods of three to ten days. These four round-trips are what are in dispute respecting the 3,000 kilometres. The Cranbrook work was at a number of sites in the area. Periodically, when site moves occurred, or work allowed it, the crew would have a break during which they would not be on the Cranbrook geological sites.

[5]            The Appellant drove the truck between Cranbrook and Calgary on Hastings' instructions.

[6]            The four-wheel drive truck was used by the Appellant in Cranbrook for Hastings' purposes only and was a necessity for the kinds of jobs and sites being checked, and for mapping, billing and other business purposes. The Appellant was retained by Hastings to travel and fulfil the obligations he undertook under the agreement which his business had with Hastings. He travelled from the Cranbrook area to and from Calgary as the exigencies of his own business (including obtaining contracts with others than Hastings, accounting and billing, and research and mapping) and his contract with Hastings required from time to time. The fact that his business office was in his home meant that the travel to Calgary was to his office in his home. Hastings saved restaurant and motel costs in Cranbrook when the Appellant was in Calgary and this was a benefit to Hastings.

[7]            The billing, research and mapping facilities of the Appellant's business respecting the Hastings and other contracts were also in Calgary. Thus, in the Court's view all of the travel to and from Calgary and Cranbrook was for the Appellant's and Hastings' business purposes, as was the 107 kilometres spent starting the truck in the 1997-98 winter. Any carrying of the children to school was incidental to "turning the truck engine over" during the winter months.

[8]            For these reasons the appeal is allowed in its entirety. The Appellant is awarded $100.00 in costs to reimburse him for his out-of-pocket disbursements in prosecuting this appeal.

Signed at Toronto, Ontario this 19th day of July 2001.

"D.W. Beaubier"

J.T.C.C.

COURT FILE NO.:                                                 2001-790(IT)I

STYLE OF CAUSE:                                               Philip Van Angeren v. The Queen

PLACE OF HEARING:                                         Calgary, Alberta

DATE OF HEARING:                                           June 22, 2001

REASONS FOR JUDGMENT BY:      The Honourable Judge D. W. Beaubier

DATE OF JUDGMENT:                                       July 19, 2001

APPEARANCES:

For the Appellant:                                                 The Appellant himself         

Counsel for the Respondent:              Michael Taylor

COUNSEL OF RECORD:

For the Appellant:                

Name:                     

Firm:                       

For the Respondent:                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

2001-790(IT)I

BETWEEN:

PHILIP VAN ANGEREN,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on June 22, 2001 at Calgary, Alberta by

the Honourable Judge D. W. Beaubier

Appearances

For the Appellant:                                The Appellant himself

Counsel for the Respondent:                Michael Taylor

JUDGMENT

The appeal from the reassessment made under the Income Tax Act for the 1998 taxation year is allowed and the reassessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.

The Appellant is awarded $100.00 in costs to reimburse him for his out-of-pocket disbursements in prosecuting this appeal.

         

Signed at Toronto, Ontario, this 19th day of July 2001.

"D.W. Beaubier"

J.T.C.C.