Rip,
T.C.C.J.
(orally):—This
is
an
appeal
from
an
income
tax
assessment
for
the
1989
taxation
year
in
which
the
Minister
of
National
Revenue
disallowed
certain
expenses
claimed
by
Mr.
Baker
in
filing
his
return
for
that
year.
Mr.
Baker
has
appealed,
electing
to
proceed
under
the
informal
rules
of
this
Court.
The
facts
are
not
in
issue.
At
all
relevant
times
Mr.
Baker
was
an
employee
of
the
Department
of
External
Affairs.
And
in
1989
he
returned
to
Ottawa
from
Australia,
and
at
the
end
of
August
of
that
year,
moved
back
to
his
residence
which
he
continues
to
consider
his
principal
residence
at
535
Broadview
Avenue.
This
property
was
acquired
by
him
in
September
1978.
He
had
left
Canada
in
1981
to
occupy
a
position
in
a
foreign
country.
And
during
the
period
1981
to
July
31,1989,
he
rented
the
property
to
at
least
four
tenants,
at
various
times
of
course,
and
deducted
various
repairs
and
maintenance
from
rentals.
In
May
of
1989
Mr.
Baker
was
advised
that
he
would
be
returning
to
Canada.
During
the
period
of
August
1989
Mr.
Baker
incurred
various
expenses
to
bring
the
premises
he
had
rented
back
to
the
condition
to
which
he
and
his
wife
would
be
comfortable;
apparently
during
the
years
in
which
the
property
was
rented,
there
was
considerable
wear
and
tear
on
the
property.
Mr.
Baker
incurred
expenses
during
the
period
of
January
1989
to
the
end
of
August
1989
of
approximately
$7,742.
Revenue
Canada
permitted
him
to
de-
duct
the
sum
of
$201.61
which
expenses
were
incurred
during
the
period
between
January
and
the
end
of
May
1989.
He
acquired
a
refrigerator
in
the
amount
of
$1,290
in
May
1989,
which
expense
was
not
incurred
on
the
basis
that
the
acquisition
of
the
refrigerator
was
a
Capital
expenditure.
Mr.
Baker
contested
this,
relying
on
the
reasons
for
judgment
of
Rogers
v.
M.N.R.
(1956),
16
Tax
A.B.C.
52,
56
D.T.C.
487
—
I
don’t
have
the
page
here,
it's
cut
off.
The
Minister
of
National
Revenue,
of
course,
relied
on
the
leading
case
in
matters
of
replacement
of
apartment
equipment,
that
is
the
Hadden
Hall
Realty
Inc.
v.
M.N.R.,
[1962]
S.C.R.
109,
[1961]
C.T.C.
509,
61
D.T.C.
1001.
As
stated
by
Abbott,
J
at
page
111
(C.T.C.
511,
D.T.C.
1002):
Expenditures
to
replace
capital
assets
which
have
become
worn
out
or
obsolete
are
something
quite
different
from
those
ordinary
annual
expenditures
for
repairs
which
fall
naturally
into
the
category
of
income
disbursements.
The
acquisition
of
a
new
refrigerator
to
replace
the
previous
refrigerator
is,
of
course,
a
replacement
of
a
capital
asset.
And
the
Minister
was
correct
in
disallowing
the
acquisition
of
the
refrigerator
as
a
current
expense.
Now,
all
the
other
expenditures
were
acquired
or
were
incurred
during
August
1989,
that
is
after
Mr.
Baker
had
ceased
to
rent
his
home,
and
were
incurred
for
the
purpose
of
bringing
the
property
up
to
a
state
to
which
he
and
his
family
could
move
in.
These
expenditures
were
not
incurred
for
the
purpose
of
gaining
or
producing
income
from
the
property
and,
therefore,
are
not
deductible
in
computing
Mr.
Baker's
income
from
property.
These
expenses
were
personal
living
expenses
of
the
appellant.
Accordingly,
the
appeal
of
Mr.
Baker
will
have
to
be
dismissed.
Thank
you
very
much.
Appeal
dismissed.
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