Title Estate v. The Queen, docket 98-2431-IT-G

Date: 20000225

Docket: 98-2431-IT-G

BETWEEN:

THE ESTATE OF HARRY TITLE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Bell, J.T.C.C.

[1] The issue is whether the amount of $71,361.60 claimed as medical expenses was an amount paid within the meaning of paragraph 118.2(2)(d) or (e) of the Income Tax Act ("Act") thereby entitling the Appellant to a deduction under subsection 118.2(1) of the Act.

FACTS:

[2] Stephen Title ("Stephen"), son of Harry Title ("Harry") and Molly Title ("Molly") testified that his father suffered from a heart condition and bad memory, and being forgetful, did not take his medication. He said that his mother, who suffered from Alzheimer's Disease, decided to have Harry moved from Mount Sinai Hospital to a home.

[3] Stephen testified that he and his sister, Sandra Samuels, looked at three separate institutions, paying attention to cleanliness, care, service, meal quality and staff. They selected Forest Hill Place ("FHP") because it was available, was the newest, had medical coverage, had good quality of care, monitored diet and administered medication. He also testified that he knew people who had been there and knew the doctor on staff. His father was admitted to that institution but his mother did not want to go and was not, in Stephen's words, in such condition of deterioration with Alzheimer's that he could oblige her to move into FHP.

[4] Stephen signed a Resident Application Form for Harry for FHP, one of the Lifestyle Retirement Communities. The information sheet accompanying the application stated that FHP had a minimum of two employees on staff at all times and had at least one registered practical nurse ("RPN") or registered nurse ("RN") on staff twenty-four hours per day, seven days per week. It also sets out that it was equipped with emergency response systems including fire alarm system, smoke and heat detectors in each unit, sprinkler system throughout, and a nurse call system located at the reception/nursing station, which could be activated by pull cords in the unit. The application showed the occupancy date as April 1, 1995. This was accompanied by a Resident Application Form bearing the same date in respect of Molly.

[5] The foregoing applications were accompanied by a document entitled Residency Agreement between the owner and Harry and Molly as Residents and Stephen as Guarantor dated April 12, 1995. The Agreement provided that subject to its terms and conditions:

the Owner grants to the Resident an exclusive licence to use and occupy suite number 705/07 in Forest Hill Place.

It also provided that

the Resident agreed to pay to the Owner an occupancy fee of $5,946.80 as set forth in the application.

[6] Provision was made for increases in the amount of the occupancy fee. The document also provided that the occupancy agreement was not a lease, did not create any interest in the real estate and other property owned or operated by the owner and that the suite was not a rental unit.

[7] A document entitled Residency Agreement was entered in evidence. It was dated January 28, 1997

[8] Neither that document in respect of Harry nor a similar document also introduced as an exhibit in respect of Molly was signed. In any event, the document respecting Harry can have no application to the 1996 taxation year. No date appears on a second Residency Agreement in respect of Mr. and Mrs. Title. This agreement was unsigned.

[9] It is common ground that the amount of $71,361.60 was in issue. After filing a Notice of Objection, the Notification of Confirmation by the Minister, provided that:

The amount claimed of $71,361.60 as a medical expense for the 1996 taxation year has not been shown to have been an amount paid in accordance with the provision of subsection 118.2(2) of the Act.

[10] A letter signed by Steven Gottesman, M.D., dated April 9, 1997 with respect to Harry stated:

This person requires a supervised setting since January 31, 1995 due to medical illness. This person requires a 24 hour companion.

[11] An identical letter was provided with respect to Molly.

[12] Stephen testified that in April, 1995 his father went into FHP. He said that in that home he had nursing supervision, administration of pills, blood pressure checks and weight checks once or twice a day. His care was administered under Dr. Gottesman's instructions and included daily blood pressure tests and night bed checks. His father had a low salt diet. The room was cleaned, the bed was made and fresh linens and laundry service were provided. A dining room, a TV room, sitting area and game facilities were available. His parents were in a one bedroom apartment. Harry and Molly received three meals per day. Stephen testified that Schedule A to the Residency Agreement provided just the basics and that they wanted the fuller service under Schedule B which provided for the matters above described. In Stephen's words,

We got everything they could provide.

[13] Harry and Molly also had a companion who, in Stephen's description, looked after his parents as if they were her own parents.

[14] On cross-examination, Stephen said that the companion was retained because he and his sister felt that his parents should have a higher degree of care. He stated that he was not faced with the prospect of whether his parents would have been able to live at FHP if they had not had a companion.

[15] Marla Borenstein ("Marla"), a registered nurse at FHP, described the total staff at FHP as being about 89 persons including 30 on the nursing staff, 25 on food service and 15 in housekeeping. Most of the nursing staff were registered practical nurses or health care aides. Although there was no doctor on staff, a doctor visited often, having a large number of patients in FHP, an office being provided for him. She described the housekeeping staff cleaning suites on a regular basis and food service and housekeeping services for all residents. She stated that she was the only RN who had a greater ability to assess conditions, and further, that RPNs did not give certain injections. She said that the aides assisted in bathing, dressing, moving people to the dining room, et cetera, they having had a six month training course for their positions. She described the nursing stations as having a clinic, a room with examination tables, a small laboratory and a medical facility. There was a nursing call bell system in the units, fire protection extinguishers on every floor and sprinkler system, et cetera.

[16] Sandra Samuels confirmed the evidence given by her brother Stephen.

ANALYSIS AND CONCLUSION:

[17] For the purposes of the medical expense credit, section 118.2(2) provides that:

... a medical expense of an individual is an amount paid ...

(d) [nursing home care] - for the full-time care in a nursing home of the patient, who has been certified by a medical practitioner to be a person who, by reason of lack of normal mental capacity, is and in the foreseeable future will continue to be dependent others for the patient's personal needs and care;

(e) [school, institution, etc.] - for the care, or the care and training at a school, institution or other place of the patient, who has been certified by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that school, institution or place for the care, or the care and training of individuals suffering from a handicap suffered by the patient;

[18] Submissions were made with respect to whether FHP was a "nursing home" and reference was made to the definition of that term in The Nursing Homes Act of Ontario. I do not need to make a decision on whether FHP was a nursing home within the meaning of the words in paragraph (d) because I have concluded that it was an "institution or other place" within the meaning of those words in paragraph (e). I also find that such institution or other place provided for the care of Harry and Molly. I conclude that each of them had:

... been certified by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specially provided by that ... institution or place for the care, or the care and training of individuals suffering from a handicap suffered by the patient;

[19] Although the word "certified" is not used, the absence of such word does not compromise the written opinion of Dr. Stephen Gottesman who said in respect of each of Harry and Molly as set out above:

This person requires a supervised setting since January 31, 1995 due to medical illness. This person requires a 24 hour companion.

[20] The word "certified" is defined in the new Shorter Oxford English Dictionary, Volume I, as follows:

1. Make (a thing) certain; guarantee as certain; give certain information of. 2. Declare or attest by a formal or legal certificate. Declare (a person) officially insane. Make(a person) certain (of); assure; give (a person) formal or legal attestation. Testify to; vouch for;

[21] I cannot imagine that the letter of a professional person, namely Steven Gottesman, M.D. would fail to have the persuasive force necessary to comply with the statutory requirements in paragraph (e) simply because the word "certify" or a derivative thereof did not appear in print. As the evidence indicates, FHP had the equipment, facilities and personnel for the care of "the patient". The word "patient" is defined in paragraph 118.2(2)(a) as meaning a person who is an individual who paid an amount or his spouse.

[22] Accordingly, the appeal is allowed with costs.

Signed at Ottawa, Canada this 25^th day of February, 2000.

"Bell"

J.T.C.C.