Christie,
CJTC:—This
appeal
relates
to
the
appellant’s
1978
taxation
year.
In
that
year
he
left
his
employment
with
Integrated
Building
Corporation
Ltd
(“Integrated”).
While
employed
he
owed
Integrated
$14,774.72,
the
repayment
of
which
was
waived
by
it.
By
notice
of
reassessment
mailed
on
June
9,
1981,
the
$14,774.72
was
added
to
the
appellant’s
total
income
for
1978.
He
objected
to
this
in
accordance
with
the
statutory
requirements
and
by
notification
dated
April
1,
1982,
the
respondent
confirmed
his
reassessment.
Hence
this
appeal.
These
facts
are
alleged
in
the
notice
of
appeal
and
admitted
by
the
respondent
in
paragraph
2
of
the
reply
to
the
notice
of
appeal:
(a)
Prior
to
the
commencement
of
my
employment
with
Integrated
(sic)
Building
Corp
Ltd
I
was
employed
by
the
Royal
Bank
of
Canada.
At
the
time
of
my
resignation
from
the
Bank,
I
was
indebted
to
them
in
the
amount
of
$17,158.76,
being
a
preferential
staff
housing
loan.
(b)
As
a
condition
of
my
employment,
Integrated
(sic)
assumed
the
bank
staff
loan
under
the
same
terms
and
conditions
as
I
had
with
my
previous
employer.
(c)
I
commenced
employment
with
Integrated
(sic)
on
July
1,
1976.
Payments
on
the
loan
commenced
September
1,
1976
and
were
made
continuously
through
January
1,
1978
at
$190.00
per
month.
(d)
I
left
employment
with
integrated
(sic)
on
May
15,
1978
at
which
time
there
was
$14,774.72
outstanding
on
my
loan,
which
amount
had
been
forgiven
by
Integrated
(sic).
In
giving
his
evidence
in
chief
the
appellant
stated
that,
while
employed
by
Integrated,
the
relationship
between
him
and
his
employer
became
strained
and
he
saw
no
point
in
carrying
on
in
what
he
described
as
a
“disintegrating
situation’’.
He
also
testified
that
the
forgiveness
of
the
outstanding
amount
of
the
loan
was
not
part
of
the
arrangement
under
which
employment
with
Integrated
came
to
an
end,
but
that
Integrated,
knowing
the
appellant
was
a
person
who
could
make
collection
very
difficult,
decided
to
write
the
loan
off
as
a
bad
debt.
In
the
course
of
cross-examination,
however,
counsel
for
the
respondent
confronted
the
appellant
with
a
letter
dated
April
29,
1978,
(Exhibit
R-l)
addressed
to
Mr
Peter
R
Oluk
of
Integrated
and
signed
by
“J
E
McArdle”.
That
signature
was
witnessed
by
W
A
Alexander.
The
document
reads:
This
letter
will
serve
as
my
official
Notice
of
Resignation
to
be
effective
February
15,
1978.
This
is
to
certify
that
all
expenses
incurred
by
me
on
behalf
of
Integrated
Building
Corp
Ltd
have
been
paid
in
fully
by
the
company.
Further,
I
would
like
to
state
that
I
am
leaving
the
employ
of
Integrated
on
good
terms
and
that
Integrated
has
been
most
generous
in
paying
me
a
resignation
allowance
and
in
the
absolute
forgiveness
of
my
loan
from
the
company
(Copy
of
the
note
attached
until
the
original
is
found)
upon
my
resignation.
The
appellant
acknowledged
his
signature,
although
he
added
that
he
was
not
the
author
of
the
letter.
He
went
on
to
testify
unconvincingly
that
it
did
not
reflect
the
reality
of
the
situation.
He
alleged
that
the
only
reason
he
signed
the
letter
was
that,
although
he
had
taken
other
employment
at
Slave
Lake,
Alberta,
in
February
1978,
he
was
to
continue
to
receive
payments
from
Integrated
for
a
period
up
to
May
15,
1978,
and
he
did
not
wish
to
do
anything
which
might
jeopardize
these
payments.
I
am
satisfied
that
the
forgiveness
of
the
balance
of
the
loan
was
an
integral
part
of
the
of
the
arrangements
under
which
the
appellant’s
employment
with
Integrated
was
brought
to
an
end
by
mutual
agreement.
This
means
there
was
a
direct
nexus
between
the
course
of
action
adopted
by
Integrated
in
respect
of
the
loan
and
the
appellant’s
employment.
The
thing
which
motivated
the
forgiveness
of
the
loan
was
the
existence
of
the
contract
of
employment.
This
brings
the
$14,774.72
within
those
provisions
of
paragraph
6(l)(a)
of
the
Income
Tax
Act
(“the
Act”)
which
require
that
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
as
income
from
employment
the
value
of
a
benefit
of
any
kind
whatever
received
by
him
in
the
year
in
respect
of,
in
the
course
of,
or
by
virtue
of
that
employment.
In
delivering
the
judgment
of
the
Supreme
Court
of
Canada
in
Nowegijick
v
The
Queen,
[1983]
CTC
20;
83
DTC
5041,
Mr
Justice
Dickson
said
at
5045:
The
phrase
“in
respect
of’
is
probably
the
widest
of
any
expression
intended
to
convey
some
connection
between
two
related
subject
matters.
I
am
also
of
the
opinion
that,
in
the
context
of
this
appeal,
subsection
5(1)
of
the
Act
is,
in
all
probability,
duplicative
of
paragraph
6(l)(a)
in
the
sense
that
the
$14,
774.72
constitutes
income
of
the
appellant
for
1978
as
being
“other
remuneration”
within
the
meaning
of
subsection
5(1)
which
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
view,
however,
of
my
express
finding
regarding
the
applicability
of
paragraph
6(1
)(a),
it
is
unnecessary
to
be
definitive
about
subsection
5(1).
In
his
notice
of
appeal
and
during
the
course
of
the
hearing,
reference
was
made
to
the
fact
that
on
February
5,
1981,
Revenue
Canada
sent
the
appellant
a
letter
indicating
the
intention
of
treating
the
balance
of
the
loan
as
taxable
income
in
the
hands
of
the
appellant
pursuant
to
section
80
of
the
Act.
The
letter
was
not
produced
in
evidence
and
there
is
no
reference
to
that
section
in
the
explanation
given
by
National
Revenue
to
the
appellant
at
the
time
of
reassessment
or
in
the
notice
of
confirmation
of
the
reassessment.
In
any
event,
whatever
prior
reference
may
have
been
made
to
section
80,
I
am
satisfied
that
it
is
irrelevant
to
the
proper
disposition
of
this
appeal.
The
appeal
is
dismissed.
Appeal
dismissed.
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