Robert G. Caudle v. Her Majesty the Queen (Informal Procedure), [1995] 1 CTC 2815

Sarchuk J.T.C.C.:-This is an appeal by Robert G. Caudle from an assessment of tax with respect to the 1991 and 1992 taxation years. He has elected the informal procedure pursuant to the provisions of section 18.1 of the Tax Court of Canada Act.

In computing taxes payable for those taxation years the appellant claimed non-refundable tax credits in the amounts of $700.06 and $719.61 respectively in respect of certain disability amounts transferred from his spouse as provided by section 118.8 of the Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1 (the ’’Act”). The Minister of National Revenue (the Minister) disallowed the credits on the basis that in the taxation years in issue the appellant’s spouse was not suffering from a severe and prolonged mental or physical impairment such that her ability to perform a basic activity of daily living was markedly restricted.

The appellant’s wife, Laureen Caudle, testified. She is a 57-year-old woman who, in the taxation years in issue, suffered from severe osteoarthritis of the knees and adductor tendonitis. She wore a hinge knee brace for support and walked with the aid of crutches. Her condition caused her some difficulty in dressing and special equipment had been installed to enable her to bathe/shower. She was unable to climb stairs unassisted and required the aid of railings, which I understand had been installed. Daily activities such as washing at the sink basin, doing the dishes, ironing, preparing meals, etc., which are normally done while standing could only be performed by her with the support of crutches, which she said was extremely difficult. During the years in issue most of the family meals were prepared by her husband or her daughter and were left for her to reheat. She said the chronic pain for which she took regular medication including cortisone injections, coupled with her immobility, restricted her to the house other than when absolutely necessary.

In 1991 arthroscopic surgery was performed on her knee but this procedure was only marginally successful due to the extent of the deterioration. The knee brace was used throughout 1991 and 1992 and while it enabled her to walk she still had substantial pain. At some point of time in the latter year she developed blood clots in her leg and ultimately stopped wearing the brace in 1993. She agreed to have knee replacement surgery which was successfully performed in December 1993. She is now able to walk with virtually no pain and without the assistance of any aids such as crutches, etc.

To permit the transfer of unused credits to the appellant pursuant to section 118.8 of the Act the evidence must establish that the appellant’s spouse was entitled to claim that credit within the meaning of the provisions of subsection 118.3(1) and section 118.4. Supporting the appellant’s claim for a non-refundable tax credit the disability tax credit certificate required by paragraph 118.3(l)(a.2) was completed and certified by her physician, a Dr. K.A. Barnett on March 17, 1992. He expressed therein the opinion that she met the eligibility criteria as set out in section 118.3 of the Act. In this certificate he described her disabling condition and stated that its effect was to render her unable to walk any distance without pain and limping.

On April 3, 1993 Dr. Barnett completed a disability tax credit medical report regarding Laureen Caudle with respect to the years 1987 to 1991. In response to specific questions relating to the eligibility criteria found in section 118.1 of the Act Dr. Barnett confirmed that she had a prolonged impairment that lasted continuously for a period of 12 months and that she had a severe impairment. With respect to the remaining criteria Dr. Barnett stated that the effects of this severe impairment did not markedly restrict her ability to perform a basic activity of daily living all or substantially all of the time, nor did the effects of this severe impairment render her unable to perform a basic activity of daily living even with the use of appropriate aids/assistance, medication or therapy.

On September 3, 1993 Dr. Barnett wrote a further letter to Revenue Canada in which he stated, in part:

...since 1990 her knees have been virtually incapacitated with arthritis, for which she has had numerous cortisone injections. She requires the use of a cane, crutches or a walker all of the time in order to walk, at that assisted and with difficulty and pain. She has extreme difficulty dressing, preparing meals and with personal hygiene. She requires the services of a community nurse.

...she is, in my opinion, completely disabled under any common definition (such as that of welfare-disability program or that of Health and Welfare’s permanent disability program) and as such, until 1992 I never had reason to question that she would also qualify for "disability" consideration in a Revenue Canada sense....

In 1992, for the first time, we were provided with details of the definition of "activities of daily living" such as "inability to feed oneself’ which suggested an extreme level of disability for which Ms. Caudle clearly did not qualify. She was so advised this year and her application was appropriately rejected (as were those of all my other ambulatory patients).

[Emphasis added. ]

Evidence was also given by Dr. E. Sutherland, a member of the disability tax credit medical advisory group which considered Laureen Caudle’s disability.

Her testimony was that Laureen Caudle was "able to walk with the use of an assistive devices” (in this case crutches and a hinged knee brace).

'This advice was no doubt sought by the Minister of National Revenue pursuant to the provisions of subsection 118.3(4) of the Act which provides:

The Minister may obtain the advice of the Department of National Health and Welfare as to whether an individual in respect of whom an amount has been claimed under subsection (1) or (2) has a severe and prolonged impairment, the effects of which are such that the individual’s ability to perform a basic activity of daily living is markedly restricted, and any person referred to in subsection

(1) or (2) shall, on request in writing by that Department for information with respect to an individual’s impairment and its effects on the individual, provide the information so requested.

While acknowledging the severity and prolonged nature of Laureen Caudle’s osteoarthritis, the Medical Advisory Group reported that she did not meet the criteria for the disability tax credit claim.

Conclusion

The issue before me is quite simply whether the severe physical impairment suffered by Laureen Caudle was such that her ability to perform a basic activity of daily living was markedly restricted. Paragraph 118.4(l)(b) provides:

an individual’s ability to perform a basic activity of daily living is markedly

restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living;

A basic activity of daily living is defined as follows by paragraphs 118.4(1)(c) and 118.4(1)(d):

118.4(1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection,

(c) a basic activity of daily living in relation to an individual means

(i) perceiving, thinking and remembering,

(ii) feeding and dressing oneself,

(iii) speaking so as to be understood, in a quiet setting, by another person familiar with the individual,

(iv) hearing so as to understand, in a quiet setting, another person familiar with the individual,

(v) eliminating (bowel and bladder functions), or

(vi) walking; and

(d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living.

The Court was also referred to the medically accepted concept of the term "activities of daily living" which is defined in Taber's Cyclopedic Medical Dictionary as follows, and I quote:

Activities of daily living. The self-care, communication, and mobility skills required for independence in everyday living. The distinction is made between basic activities of daily living and ancillary activities, such as, telephone use, preparing meals, laundry, house cleaning, taking medicines, receiving medical treatments and handling finances, etc. SYN-independent living skills; daily living skills.

Reference was also made to a similar definition in Krusen ’s Handbook

of Physical Medical and Rehabilitation:

The levels of independence of physical function which are referred to as self-care activities or activities of daily living, ADLs. The activities that must be performed to achieve functional independence are classified as mobility activities, hygiene, eating, dressing and bowel and bladder control.

These definitions appear to have been taken into account in the drafting of paragraph 118.4(1 )(c).

The question is whether the appellant’s wife meets the criteria found in subsections 118.3(1) and 118.4(1). I note that subsection 118.4(1) was amended by 1990, c. 49, s. 91(1) applicable to the 1991 and subsequent taxation years. The current definition appears to be narrow and restrictive, however, it is obvious that Parliament, as a matter of policy, had intended to create, as Dr. Barnett stated in his letter, an extreme level of disability in order to qualify. Furthermore, I cannot ignore that activities such as housekeeping or social or recreational activities are by definition not to be considered as a basic activity of daily living.

On the evidence before me I have concluded that Laureen Caudle does not come within the meaning of the words in section 118.4. She suffered a great deal of pain and discomfort, her ability to perform many normal tasks was hampered as was her mobility, but on the evidence I cannot conclude that she was markedly restricted in her activities of daily living as that term is defined in the Act.

The appeal is dismissed.

Appeal dismissed.