Rowe,
D.T.C.J.:—The
appellant
appeals
from
reassessments
of
income
tax
for
the
1985
and
1986
taxation
years.
The
respondent
included
into
income
the
sums
of
$54,370.95
and
$30,589,70
in
1985
and
1986
respectively,
received
by
the
appellant
from
Bosco
Homes
Society
in
accordance
with
the
provisions
of
section
3
and
subsection
5(1)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
The
position
taken
by
the
appellant
is
that
the
funds
received
by
her
from
the
Bosco
Society
were
unconnected
with
employment
and
as
such
are
not
taxable
income.
Father
Lucien
Larre
of
Fairborn,
Ohio,
testified
he
is
a
Roman
Catholic
priest
having
been
ordained
in
1958.
His
educational
achievements
include
a
M.
Ed.
and
an
M.A.
in
history.
He
taught
school
in
North
Battleford,
Red
Deer
and
Medicine
Hat
before
moving
to
Regina.
In
Regina
he
taught
school
and
operated
a
counselling
centre
where
he
discovered
a
great
many
problems
encountered
by
young
people.
He
decided
to
start
Bosco
Homes
Society
for
the
purposes
of
dealing
with
some
of
the
troubles
experienced
by
youth
and
purchased
a
house
which
served
as
a
group
home.
Bosco,
a
charitable
institution,
had
a
general
mandate
to
look
after
young
people
with
serious
emotional
problems
and
to
assist
their
families.
An
extension
of
the
service
provided
was
to
establish
a
Crisis
Centre
and
another
division
within
Bosco
to
deal
with
children
who
had
learning
disabilities.
In
1971
he
learned
there
was
no
psychiatrist
in
Regina
specializing
in
mental
disorders
of
children
and
was
of
the
opinion
that
existing
methodology
of
treatment
involving
chemicals
and
electro-convulsive
therapy
was
inappropriate.
He
travelled
to
Ottawa
and
was
able
to
retain
the
services
of
a
clinical
psychologist
who
agreed
to
come
to
Regina
and
work
with
Bosco.
This
person
remained
for
three
years
and
Father
Larre
then
had
to
find
other
professionals
in
that
field
on
a
rotating
basis
to
provide
the
necessary
service.
The
difficulty
in
finding
the
right
professional
in
the
psychology
or
psychiatry
discipline
to
come
to
Regina
and
remain
for
an
extended
period
led
him
to
the
conclusion
that
what
Bosco
needed
was
a
"home-grown"
psychologist.
He
had
known
the
appellant
from
when
she
had
worked
at
Canada
Manpower
and
also
from
her
teaching
at
the
Bosco
school.
She
had
special
training
in
the
field
of
remedial
reading
and
from
her
time
at
Bosco
he
formed
the
opinion
she
had
an
amazing
ability
to
relate
to
children.
Through
investigation
he
discovered
educational
institutions
in
the
United
States
which
trained
individuals
to
become
practising
clinical
psychologists
with
extensive
emphasis
on
the
practical
end
of
actually
teaching
the
proper
methods
of
therapy.
The
appellant
had
been
teaching
at
Bosco
for
six
years
at
this
point
and
had
been
handling
a
variety
of
other
duties
made
necessary
by
the
family
atmosphere
within
the
Society.
The
Bosco
School
was
required
to
follow
the
curriculum
established
by
the
Department
of
Education
of
the
Province
of
Saskatchewan
and
its
teachers
were
required
to
be
members
of
the
Saskatchewan
Teachers
Federation
and
were
paid
according
to
the
schedules
negotiated
by
that
organization.
Father
Larre
knew
the
appellant
to
be
hard
working
and
dedicated
to
working
with
children,
key
ingredients,
in
his
opinion,
for
a
child
psychotherapist,
In
1979
he
approached
the
appellant
with
the
suggestion
she
attend
an
institution
in
Chicago,
Illinois,
for
the
purpose
of
becoming
a
clinical
psychologist.
The
appellant
was
a
single
parent
with
a
young
son
and
did
not
have
the
financial
resources
to
attend
a
foreign
educational
institution
for
an
extended
period
of
time.
The
response
of
Father
Larre
was
to
inform
her
she
need
not
worry
about
money
as
Bosco
Society
would
raise
the
required
funds
to
enable
her
to
obtain
the
desired
education.
In
response
to
queries
from
the
appellant,
Father
Larre
told
her
on
several
occasions
that
the
money
for
her
education
would
be
provided
with
“no
strings
attached”
and
if
she
decided,
after
graduation,
to
remain
in
the
United
States
or
to
get
married
or
to
relocate
elsewhere
in
Canada
that
decision
would
be
hers
to
make.
She
pressed
him
further
about
her
concerns
over
repaying
the
money
at
a
future
date
and
he
again
told
her
there
would
be
no
requirement
whatsoever
for
her
to
repay
any
money.
The
appellant
was
also
concerned
about
maintaining
her
teacher's
pension
fund
with
the
Saskatchewan
Teachers
Federation
and
maintaining
her
professional
status
by
continuing
to
pay
her
dues.
Father
Larre
determined
that
to
maintain
the
appellant's
pension
and
professional
status
she
would
have
to
be
classified
with
the
Federation
as
being
on
sabbatical
leave.
Therefore,
he
informed
the
appellant
Bosco
would
ensure
the
required
pension
fund
contributions
and
membership
dues
would
be
paid
on
her
behalf
by
Bosco.
He
contacted
the
Federation
and
informed
them
the
appellant
was
on
sabbatical
leave
and
would
be
returning
to
teach
in
Saskatchewan.
The
Board
of
Directors
of
Bosco
were
made
aware
of
the
arrangement
entered
into
between
Father
Larre
and
the
appellant
and
approved
of
the
intention
to
provide
monetary
support
to
her
for
the
purpose
of
enabling
her
to
attain
credentials
as
a
clinical
psychologist.
The
overall
mandate
of
Bosco
included
treatment
of
highly
delinquent
youths
with
a
history
of
neglect
and
abuse,
serious
criminal
behaviour,
drug
and
alcohol
addiction
and
severe
emotional
disorders.
It
provided
the
only
facility
of
its
kind
west
of
Toronto
and
in
the
consensus
of
the
Board
of
Directors
it
was
cost-effective
to
spend
over
$150,000,
if
necessary,
to
train
a
competent
child
psychologist
as
opposed
to
the
long-term
cost
to
society
at
large
of
incarcerating
even
one
youth
for
life,
at
a
projected
cost
to
the
system
of
over
$1
million.
In
Father
Larre's
opinion
the
various
governments
spend
too
little,
too
late
to
alleviate
the
problem
and
professionals
in
the
special
discipline
of
child
psychology
were
in
short
supply
and
did
not
want
to
live
in
Regina
for
more
than
a
couple
of
years.
The
appellant
decided
to
attend
the
Illinois
School
of
Professional
Psychology
in
Chicago
and
Bosco
sent
money
to
her
each
month
to
meet
the
requirements
of
a
budget
she
had
worked
out
with
Father
Larre.
Additional
funds
were
needed
from
time
to
time
to
place
the
appellant's
son
in
a
private
school
and
for
the
cost
of
her
therapy,
an
integral
part
of
her
training.
Father
Larre's
instructions
to
her
on
many
occasions
were,
"You
worry
about
passing
the
course
and
I'll
worry
about
the
money.”
The
appellant
and
Father
Larre
on
behalf
of
Bosco
did
not
reduce
their
arrangement
to
writing.
On
August
4,
1981
Father
Larre
completed
a
record
of
employment
form
(Exhibit
A-1)
for
Employment
and
Immigration
Canada
indicating
the
appellant's
employment
with
Bosco
Homes
had
been
terminated
on
June
30,
1981.
In
the
area
reserved
for
comments
there
was
the
notation:
Sabbatical
leave
of
absence
to
study
in
Chicago,
Illinois,
U.S.A.
Father
Larre
inserted
that
comment
as
he
was
unsure
what
was
required
but
was
aware
the
appellant
had
to
enter
the
United
States
on
a
student
visa
and
he
had
to
assure
the
U.S.
immigration
authorities
that
she
was
indeed
on
a
sabbatical
leave
from
Bosco
and
that
Bosco
would
be
responsible
for
her
financial
support
and
she
would
not
become
a
burden
on
the
U.S.
taxpayers.
Apparently,
the
record
of
employment
form
was
one
of
the
documents
used
for
that
purpose.
In
cross-examination,
Father
Larre
stated
he
did
not
choose
the
appellant
as
a
reward
for
hard
work
in
the
past
but
because
the
course
in
Illinois
was
very
difficult
and
the
practice
of
clinical
child
psychology
is
extremely
demanding.
Other
teachers
at
Bosco
had
also
worked
very
hard
for
periods
ranging
up
to
16
years
and
were
given
only
a
small
token
of
appreciation
upon
leaving.
He
described
himself
as
a
"dreamer",
looking
toward
the
future
when
Bosco
would
be
a
first-class
treatment
centre
and
not
a
facility
just
for
warehousing
delinquent
or
troubled
youth.
As
such,
the
appellant
obtaining
the
proper
training
and
credentials
fitted
in
with
his
long-range
vision.
He
agreed
that
he
wanted
the
appellant
to
return
to
Regina
and
work
for
Bosco
but
the
only
way
he
could
convince
her
to
go
for
the
specialized
training
was
to
convince
her
there
were
no
strings
or
conditions
attached
to
her
receiving
funds
from
Bosco.
Although
the
appellant
attended
at
the
Bosco
facility
during
the
summers
she
worked
solely
as
a
volunteer
including
helping
out
with
the
organization
of
a
Country
Music
Jamboree
held
to
raise
money
for
the
Society.
He
did
not
consider
her
to
be
an
employee
and
she
was
not
on
any
payroll
of
Bosco
during
the
time
she
was
attending
school
in
the
United
States.
By
the
time
she
had
graduated
from
the
institution
in
Illinois
and
returned
to
work
for
Bosco
the
Society
was
now
a
structured
and
organized
treatment
centre
as
opposed
to
the
early
days
when
it
was
run
in
a
family-like
setting.
Dr.
Yaholnitsky-Smith
testified
she
lives
in
Regina,
is
currently
employed
as
an
assistant
professor
of
Psychology
at
the
University
of
Regina
and
is
also
a
therapist.
She
first
met
Father
Larre
while
employed
with
Canada
Manpower
when
he
attended
for
the
purpose
of
enquiring
about
job
placement
for
some
of
the
young
people
at
the
Bosco
Homes.
She
had
come
to
the
conclusion
she
should
find
an
occupation
which
would
permit
her
to
have
free
time
in
the
summer
to
spend
with
her
son
as
she
was
a
single
parent.
She
attended
the
University
of
Regina
four
nights
a
week
and
went
full
time
one
semester
in
the
summer,
having
obtained
leave
from
Canada
Manpower.
After
graduating
in
education
she
telephoned
Father
Larre
intending
to
ask
him
to
provide
a
reference
for
her
so
she
could
apply
for
a
teaching
position
with
a
school.
Father
Larre
discovered
she
had
trained
in
the
field
of
remedial
reading
and
invited
her
to
come
to
the
Bosco
Home
facility
for
lunch,
after
which
he
hired
her
to
teach
at
the
school
run
by
Bosco.
The
school
was
in
the
basement
of
an
unfinished
duplex,
without
proper
flooring
or
partitions
and
the
few
desks
and
chairs
were
borrowed.
Bosco
also
operated
a
treatment
centre
and
a
residential
school
for
live-in
children.
After
working
for
Bosco
as
a
teacher
for
six
years,
Father
Larre
came
to
her
one
day
after
Mass
and
told
her
he
wanted
her
to
go
back
to
school
and
obtain
her
Doctorate
in
psychology.
Her
initial
response
was
she
could
not
afford
to
do
that
and
he
advised
they
would
speak
again
in
a
couple
of
days.
She
discussed
the
proposal
with
her
parents
and
they
shared
her
concerns
about
the
amount
of
money
required
and
the
fact
she
would
be
leaving
Canada
for
five
years
with
her
seven-year-old
son.
She
decided
to
attend
at
the
school
in
Chicago
to
examine
the
facility
and
the
program
but
was
not
accepted
for
study
as
they
felt
she
had
to
wait
for
a
year
and
deal
with
some
of
the
difficulties
encountered
in
the
recent
dissolution
of
her
marriage.
However,
the
next
year
she
was
accepted
at
the
Illinois
School
of
Professional
Psychology
and
attempted
to
raise
money
for
her
studies
from
the
government
of
the
province
of
Saskatchewan
but
none
was
available.
However,
Father
Larre
assured
her
the
money
for
her
studies
would
be
forthcoming
from
Bosco
and
that
she
was
under
no
obligation
to
return
to
work
for
Bosco.
She
felt
it
was
an
honour
to
be
sent
away
to
obtain
the
specialized
education
and
believed
the
odds
were
very
good
that
she
would
return
to
Saskatchewan
and
Bosco
once
the
course
of
study
had
been
successfully
completed.
She
regarded
the
moneys
received
by
her
during
her
studies
in
Illinois
as
similar
to
a
"gift
from
a
parent”.
The
money
from
Bosco
would
arrive
in
Chicago
each
month
at
about
the
same
time
and
usually
in
the
same
amount
unless
extra
costs
had
been
incurred
and
sufficient
additional
money
would
be
included
to
cover
that
purpose.
She
graduated
in
May
of
1986
with
a
Ph.D.
in
psychology,
returned
to
Regina
and
worked
for
Bosco
until
November
of
1988.
In
cross-examination,
the
appellant
was
referred
to
her
1985
T1
return
of
income,
which
was
filed
as
Exhibit
R-1.
Included
in
the
return
was
a
T4
from
Bosco
Homes
indicating
employment
income
of
$3,272.48
which
was
made
up
of
a
$17.50
contribution
to
the
Canada
Pension
Plan,
$77
in
premium
for
Unemployment
Insurance,
$2818.26
as
the
contribution
to
her
Teachers'
Federation
Pension
Plan
and
$174.60
for
union
dues.
On
the
form
in
the
space
provided
for:
Type
of
work
or
occupation
in
1985
is
the
entry,
"Doctoral
student.”
On
the
line
calling
for
the
name
of
present
employer
the
entry
reads:
On
leave
of
absence
from
Bosco
Society.
The
appellant
agreed
she
had
prepared
the
return
in
that
fashion
and,
that
the
money
sent
to
her
by
Bosco
was
for
the
express
purpose
of
permitting
her
to
attend
school
in
Illinois.
On
her
return
to
Regina
in
the
summers
she
helped
out
at
Bosco
or
with
projects
being
carried
out
by
the
Society
but
did
so
as
a
volunteer.
While
she
fully
believed
throughout
she
would
probably
return
to
Regina
and
Bosco
she
felt
there
was
no
obligation
on
her
part
to
do
so
and
had
things
worked
out
differently,
for
example
deciding
to
marry
in
the
United
States,
she
would
have
felt
free
in
doing
so
and
not
coming
back
to
Regina.
The
argument
on
behalf
of
the
appellant
is
that
Bosco
Homes
Society,
a
charitable
institution,
was
obviously
out
of
the
mainstream
of
commercial
or
business
enterprises
and
the
payment
to
the
appellant
was
in
the
same
category
as
a
parent
giving
money
to
a
son
or
daughter
to
acquire
an
education.
The
payments,
not
having
any
legal
obligation
connected
with
employment,
were
gifts
and
as
such
are
not
taxable.
Counsel
for
the
respondent
submitted
that
the
evidence
established
the
appellant
was
in
fact
an
employee
of
Bosco
and
that
the
applicable
paragraph
of
the
Income
Tax
Act
is
6(1)(a)
which
renders
the
money
received
a
taxable
benefit.
In
the
alternative,
if
she
is
to
be
found
not
to
have
been
an
employee
during
the
relevant
period,
then
the
money
received
by
her
is
still
taxable
as
a
consequence
of
the
effect
of
subsection
6(3)
of
the
Act
which
deems
the
amounts
to
be
remuneration
from
employment.
The
first
issue
to
be
decided
is
whether
the
appellant
was
employed
by
Bosco
Homes
Society
during
the
years
under
appeal
at
a
time
when
she
received
the
payments.
The
definition
of
employment
is
found
in
subsection
248(1)
of
the
Income
Tax
Act
as
is
as
follows:
“employment”
means
the
position
of
an
individual
in
the
service
of
some
other
person
(including
Her
Majesty
or
a
foreign
state
or
Sovereign)
and
"servant"
or
"employee"
means
a
person
holding
such
position;
The
record
of
employment
(Exhibit
A-1)
indicates
the
appellant's
employment
with
Bosco
was
terminated
June
30,
1981.
At
the
same
time,
that
particular
document
notes
she
was
on
a
sabbatical
leave
of
absence
to
study
in
Chicago.
The
appellant
in
filling
out
her
tax
return
for
the
1985
taxation
year
obviously
regarded
herself
as
being
a
Doctoral
student
on
leave
of
absence
from
her
employer,
Bosco
Society.
However,
the
evidence
of
the
appellant
and
Father
Larre
is
that
she
did
not
thereafter,
until
she
returned
to
work
for
Bosco
in
July
of
1986,
perform
services
for
Bosco
other
than
on
a
volunteer
basis.
Neither
the
appellant
nor
Father
Larre
considered
her
to
be
an
employee
of
Bosco
during
the
time
she
was
studying
in
the
United
States.
The
T4-1985
included
in
the
appellant's
return
showed
the
amount
paid
by
Bosco
on
her
behalf
for
C.P.P.,
U.
I.,
pension
fund
and
union
dues,
and
in
the
appropriate
space
provided
Bosco
Homes
is
listed
as
the
employer
or
payer.
There
is
no
question
that
in
accordance
with
the
arrangement
entered
into
between
the
appellant
and
Father
Larre,
Bosco
was
indeed
the
payer
and
that
is
a
more
accurate
description
of
the
relationship
with
the
appellant
than
the
use
of
the
word:
employer.
The
pension
fund
contribution
and
union
dues
were
not
paid
to
maintain
any
status
or
relationship
between
the
appellant
and
Bosco
but
to
preserve
her
rights
under
the
Saskatchewan
Teachers
Federation
superannuation
plan
and
to
keep
current
her
professional
status
as
a
teacher,
qualified
in
the
province
of
Saskatchewan.
There
is
therefore
a
distinction
between
the
appellant's
situation
and
that
of
the
taxpayer
in
Thomson
v.
M.N.R.
(1956),
Tax
A.B.C.
366,
56
D.T.C.
393.
In
that
case,
the
taxpayer,
while
employed
with
the
Ontario
Department
of
Health,
obtained
from
his
employer
bursary
payments
while
he
pursued
his
studies.
At
the
conclusion
of
the
course
he
resumed
his
duties
with
the
Department
of
Health.
The
Minister
included
the
amount
of
the
payments
into
income
and
the
taxpayer
contended
the
money
paid
pursuant
to
a
bursary
agreement
entered
into
by
both
parties
was
in
the
nature
of
a
voluntary
payment
or
gift.
C.L.
Snyder,
Q.C.
of
the
Income
Tax
Appeal
Board,
at
page
373
(D.T.C.
398)
of
his
judgment
stated:
It
is
in
evidence
that
the
Ontario
Department
of
Health
exercised
no
control
over
the
appellant
during
1954,
that
he
was
required
only
to
continue
his
studies
and
to
attain
a
certain
standard
of
competence
and,
on
completion
of
the
course,
to
engage
in
employment
satisfactory
to
the
Minister
of
Health.
Had
the
appellant
determined
to
end
his
employment
with
the
Ontario
Department
of
Health
at
June
30,
1953,
it
would
have
been
possible
for
him
to
do
so.
It
has
been
proven
that
the
bursary
assistance
was
not
received
because
of
his
previous
employment
or
on
condition
that
he
return
to
the
employment
of
the
Ontario
Department
of
Health.
His
omission
to
resign
and
finally
cut
his
ties
with
the
Ontario
government
leaves
considerable
uncertainty
that
his
employment
ended
at
June
30,
1953,
and
it
cannot
be
found
that
the
assessment
herein
was
not
properly
made
in
accordance
with
sections
3
and
5
of
the
Income
Tax
Act.
Having
regard
to
all
of
the
evidence
before
me,
I
conclude
that
during
the
years
in
which
the
appellant
was
studying
in
the
United
States,
including
the
years
under
appeal,
the
appellant
was
not
an
employee
of
Bosco.
However,
that
does
not
end
the
matter
as
the
effect
of
subsection
6(3)
of
the
Income
Tax
Act
must
be
considered
and
it
reads
as
follows:
6.
(3)
An
amount
received
by
one
person
from
another
(a)
during
a
period
while
the
payee
was
an
officer
of,
or
in
the
employment
of,
the
payer,
or
(b)
on
account
or
in
lieu
of
payment
of
or
in
satisfaction
of
an
Obligation
arising
out
of
an
agreement
made
by
the
payer
with
the
payee
immediately
prior
to,
during
or
immediately
after
a
period
that
the
payee
was
an
officer
of
or
in
the
employment
of
the
payer,
shall
be
deemed,
for
the
purposes
of
section
5,
to
be
remuneration
for
the
payee's
services
rendered
as
an
officer
or
during
the
period
of
employment,
unless
it
is
established
that,
irrespective
of
when
the
agreement,
if
any,
under
which
the
amount
was
received
was
made
or
the
form
or
legal
effect
thereof,
it
cannot
reasonably
be
regarded
as
having
been
received
(c)
as
consideration
or
partial
consideration
for
accepting
the
office
or
entering
into
the
contract
of
employment,
(d)
as
remuneration
or
partial
remuneration
for
services
as
an
officer
or
under
the
contract
of
employment,
or
(e)
in
consideration
or
partial
consideration
for
a
covenant
with
reference
to
what
the
officer
or
employee
is,
or
is
not,
to
do
before
or
after
the
termination
of
the
employment.
Subsection
5(1)
of
the
Act
reads:
5.
(1)
Subject
to
this
Part,
a
taxpayer's
income
for
a
taxation
year
from
an
office
or
employment
is
the
salary,
wages
and
other
remuneration,
including
gratuities,
received
by
him
in
the
year.”
In
Kulka
v.
M.N.R.,
[1979]
C.T.C.
2989,
79
D.T.C.
817,
the
Honourable
L.J.
Cardin,
as
he
then
was,
Chairman
of
the
Tax
Review
Board,
considered
the
matter
of
a
taxpayer
who
had
worked
for
a
company
as
a
research
chemist
for
33
years.
More
than
a
year
after
he
retired,
the
taxpayer's
former
employer
paid
him
a
gratuitous
bonus
in
recognition
of
his
long
and
distinguished
service.
At
page
2990
(819
D.T.C.)
of
his
judgment
Chairman
Cardin
stated:
I
am
satisfied,
on
the
basis
of
the
evidence
and
particularly
on
the
basis
of
Uniroyal's
letter
dated
May
27,
1977,
that
the
award
of
$50,000
was
not
a
retiring
allowance
for
long
service
within
the
meaning
of
subsection
245(1)
of
the
Act,
but
a
tangible
acknowledgement
by
the
employer
of
the
appellant's
excellence
and
ingenuity
in
carrying
out
his
work.
There
is
no
doubt
in
my
mind
that
the
$50,000
"gross"
was
intended
by
the
employer
as
a
voluntary
surprise
payment
or
a
bonus
to
a
very
valuable
employee.
The
wording
of
subsection
5(1),
however,
is
so
broad
that
it
encompasses
such
a
voluntary
payment,
even
made
by
the
employer
after
the
appellant's
retirement
since
the
payment
made
by
the
employer
is
directly
related
to
the
work
done
by
the
appellant
while
he
was
employed
by
Uniroyal.
The
agreement
entered
into
between
Father
Larre
on
behalf
of
Bosco,
and
the
appellant,
while
she
was
still
employed
with
Bosco,
or
immediately
thereafter,
was
that
she
would
be
supported
financially
for
the
period
required
to
obtain
her
Doctorate
in
clinical
psychology.
It
is
doubtful
whether
either
party
would
have
been
successful
in
litigation
to
force
the
other
to
abide
by
the
terms
but
there
is
no
doubt
both
parties
acted
throughout
pursuant
to
an
"obligation",
which
is
the
word
used
in
paragraph
6(3)(b)
of
the
Act.
As
a
consequence
any
payments
made
pursuant
to
such
obligation
arising
out
of
an
agreement
made
by
the
payer
with
the
payee
shall
be
deemed
to
be
remuneration
for
the
payee's
services
rendered
during
the
period
of
employment
unless
it
can
be
established,
irrespective
of
when
the
agreement
if
any
was
made
or
the
amounts
were
received
and
without
regard
to
the
form
or
legal
effect
of
any
such
agreement,
that
1.
The
amount
received
cannot
reasonably
be
regarded
as
consideration
or
partial
consideration
for
accepting
the
office
or
entering
into
the
contract
of
employment,
2.
The
amount
received
cannot
reasonably
be
regarded
as
being
remuneration
or
partial
remuneration
for
services
under
the
contract
of
employment,
3.
The
amount
received
cannot
reasonably
be
regarded
as
being
in
consideration
or
partial
consideration
for
a
covenant
with
reference
to
what
the
employee
is,
or
is
not,
to
do
before
or
after
the
termination
of
employment.
Webster's
Dictionary,
1988
ed.,
defines
"covenant"
as:
a
mutual
and
solemn
agreement;
a
contract;
a
compact;
a
written
agreement.
The
same
reference
defines"obligation"
as:
the
binding
power
of
a
promise
or
contract;
indebtedness
for
a
favour
of
kindness;
a
duty;
a
legal
bond.
The
evidence
of
Father
Larre
and
the
appellant
establishes
that
while
neither
party
operated
under
any
legal
constraints
regarding
the
payment
or
receipt
of
the
money
paid
for
the
appellant's
support,
there
was
a
bargain
struck,
a
mutual
obligation,
The
appellant
agreed
to
relocate
to
the
United
States
and
to
work
hard,
pass
her
examinations,
and
obtain
qualification
as
a
clinical
psychologist
specializing
in
emotionally
disturbed
children,
Father
Larre
and
the
Directors
of
Bosco
agreed
to
provide
her
with
the
necessary
ongoing
financial
support
to
see
her
through.
Although
Father
Larre
was
content,
if
need
be,
for
the
appellant
to
provide
her
expertise
after
graduation
to
others
elsewhere
as
a
contribution
to
the
betterment
of
humanity,
he
had
good
reason
to
expect
she
would
return
to
Regina
and
to
Bosco
where
she
would
use
her
skills
dealing
with
emotionally
disturbed
young
people.
The
appellant,
while
feeling
free
not
to
so
return,
believed
she
would
do
so
and
in
fact
became
re-employed
by
Bosco
after
her
graduation.
Throughout
the
period
the
appellant
was
studying
in
the
United
States,
both
parties
acted
towards
third
parties
as
though
she
were
maintaining
a
connection
with
Bosco
as
a
past
employer
and
a
future
employer.
I
refer
to
the
representations
made
to
the
United
States
Immigration
Service
to
permit
her
to
obtain
a
student
visa,
the
ongoing
contributions
to
the
Saskatchewan
Teachers
Federation
pension
fund
and
the
payment
of
her
annual
dues,
and
the
manner
in
which
the
appellant
filed
her
tax
return
for
the
1985
taxation
year.
Although
those
postures,
taken
together
with
other
evidence,
did
not
result
in
a
finding
of
actual
employment
they
are
nonetheless
significant
in
an
examination
of
the
entire
manner
in
which
the
parties
conducted
themselves
in
pursuance
of
the
bargain
struck
while
the
appellant
was
employed
by
Bosco
and
then
offered
the
support
to
undertake
the
studies
in
the
United
States.
Individuals
are
shaped
by
their
surrounding
climate
and
it
is
therefore
not
unusual
for
one
to
blow
hot
and
cold
at
the
same
time
in
Regina.
However,
the
entire
conduct
of
the
parties
is
such
that
for
some
purposes
the
factor
of
continued
employment
of
the
appellant
by
Bosco
in
the
future
on
completion
of
her
studies
was
significant
to
both.
At
the
same
time
neither
Father
Larre
or
the
appellant
felt
they
had
created
any
legal
obligation
enforceable
in
contract
by
a
court.
The
motives
of
Father
Larre
were
not
only
commendable
but
inherently
unselfish
and
borne
of
a
vision
of
the
future
needs
of
Bosco
in
continuing
to
provide
treatment
to
highly
delinquent
and
troubled
children.
The
appellant
sacrificed
the
time
needed
for
the
difficult
course
of
study
in
a
large
metropolitan
area
in
a
foreign
country,
relocating
herself
and
her
sevenyear-old
son
away
from
her
home
and
family
in
Regina
for
the
better
part
of
five
years.
The
wording
contained
in
subsection
6(3)
is
so
broad
and
designed
to
minimize,
if
not
exclude,
the
legal
effect
of
an
agreement,
if
any,
that
it
will
catch
all
payments
in
the
taxable
income
basket
unless
the
recipient
can
establish
such
moneys
cannot
reasonably
be
regarded
as
having
been
received
under
one
of
the
three
categories
earlier
set
forth.
The
appellant
has
not
established
that
the
payments
of
money
received
by
her
in
the
taxation
years
under
appeal
cannot
reasonably
be
regarded
as
having
been
received
by
her
in
consideration
or
partial
consideration
of
her
covenant
to
attend
the
institute
in
Illinois,
such
covenant,
agreement
and
resulting
obligation
having
been
made
before,
during
and
immediately
after
the
termination
of
her
employment
with
Bosco.
As
aresult
the
effect
of
the
deeming
provision
in
subsection
6(1)
is
undisturbed
and
the
money
received
by
her
falls
into
income
by
virtue
of
the
provisions
of
subsection
5(1)
of
the
Act.
The
appeal
is
hereby
dismissed.
Appeal
dismissed.
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