Taylor,
TCJ:—This
is
an
appeal
heard
in
London,
Ontario,
on
April
11,
1984
against
an
income
tax
assessment
for
the
year
1980
in
which
the
Minister
of
National
Revenue
disallowed
as
a
deduction
certain
travelling
expenses
claimed.
Both
parties
relied
upon
the
provisions
of
paragraph
8(l)(h)
of
the
Income
Tax
Act.
In
the
interest
of
clarity,
the
inclusion
of
some
of
the
critical
documentation
seems
to
be
appropriate.
Notice
of
Appeal
Using
bulletin
No
IT272
as
a
reference
and
a
letter
from
G
Miehm,
Appeals
Division
dated
Sept
7,
1982
as
the
reason
for
denial
of
the
Objection
the
following
Appeal
is
outlined.
I
feel
qualifications
under
section
17(a)
(b)
(c)
(d)
have
all
been
met.
As
outlined
in
a
letter
from
J
F
Rees,
Director
Provincial
Schools
Branch
in
a
memorandum
of
agreement,
“Mr
Charlton
will
continue
on
the
staff
of
the
Wellington
County
Board
of
Education”
and
the
assignment
was
temporary,
“September
1,
1980
to
June
30,
1981
and
September
1,
1981
to
June
30,
1982”.
“Relocation
expenses
.
.
.
will
not
be
paid
when
the
secondee
lives
within
reasonable
commuting
distance
of
the
school/office”.
Therefore
I
was
“ordinarily
required
to
carry
on
the
duties
of
(my)
employment
away
from
(my)
employer’s
place
of
business”.
17(a)
Also
“Required”
means
that
the
travelling
is
necessary
to
the
satisfactory
performance
of
the
employee’s
duties;
it
does
not
necessarily
imply
the
employer
must
order
him
to
travel.
This
would
be
in
contrast
to
the
letter
from
G
Miehm
(Sept
7,
1982
encl)
that
my
appeal
was
denied
since
it
was
not
a
“requisite
of
your
employment
contract
to
accept
the
Minister’s
offer
to
work
at
the
Trillium
School”.
No
transportation
costs
were
paid
by
the
board
as
outlined
in
the
letter
from
R
R
Corbett
(1982
June
08
encl).
This
would
satisfactorily
meet
17(b)
(c)
(d).
Attachments
to
Notice
of
Appeal
July
11,
1980
Mr
W
G
Forsythe
Director
of
Education
Wellington
County
Board
of
Education
500
Victoria
Road
North
Guelph,
Ontario
NIE
6K2
Dear
Mr
Forsythe:
This
memorandum
of
agreement
will
confirm
arrangements
made
for
the
secondment
of
Mr
John
Pichard
Charlton
from
the
Wellington
County
Board
of
Education
to
the
Ministry
of
Education.
Mr
Charlton
will
continue
on
the
staff
of
the
Wellington
County
Board
of
Education
and
will
be
assigned
to
the
Ministry
of
Education
under
the
following
conditions:
(a)
The
period
of
secondment
will
be
September
1,
1980
to
June
30,
1981
and
September
1,
1981
to
June
30,
1982
during
which
time
Mr
Charlton
will
undertake
assignments
as
designated
by
the
Ministry
of
Education.
(b)
The
Wellington
County
Board
of
Education
will
continue
to
pay
Mr
Charlton
in
the
usual
manner
but
the
Ministry
of
Education
agrees
to
reimburse
the
Board
for
Mr
Charlton’s
salary
and
the
employer’s
share
of
fringe
benefit
costs,
in
accordance
with
his
salary
for
1980-81
and
1981-82.
The
Board
is
requested
to
provide
salary
schedules
and
the
detailed
breakdown
of
the
employer’s
share
of
fringe
benefits.
Payments
will
be
made
as
follows:
in
October,
40%,
in
February,
30%
and
in
May,
30%
of
the
total
amount
payable.
Salary
increases
arising
from
contract
negotiations
will
be
honoured
by
the
Ministry.
(c)
In
the
case
of
illness,
the
Ministry
of
Education
will
grant
Mr
Charlton
up
to
20
days
sick
leave
with
pay
per
year.
This
means
that
the
Ministry
will
pay
the
Board
for
days
absent
due
to
illness
up
to
20
days.
Any
absence
in
excess
of
20
days
per
year
will
not
be
paid
by
the
Ministry
but
will
be
deducted
from
Mr
Charlton’s
cumulative
sick
leave
credits
at
the
Board.
Note:
The
Ministry
of
Education
will
report
absences
to
the
Board.
(d)
Mr
Charlton
will
receive
reimbursement
for
travel
and
accommodation
expenses
while
travelling
on
government
business
on
the
same
basis
as
applicable
to
civil
servants
who
travel
on
government
business.
(e)
Relocation
expenses,
if
applicable,
will
be
in
accordance
with
Ontario
Government
regulations
for
secondées
but
will
not
be
paid
when
the
secondee
lives
within
reasonable
commuting
distance
of
the
school/office.
(f)
Normal
school
holidays
will
be
observed.
If
you
are
in
agreement
with
the
above
terms,
I
would
appreciate
your
confirmation
in
writing.
Yours
sincerely,
J
F
Rees
Director
Provincial
Schools
Branch
March
9,
1982
Revenue
Canada
Taxation
166
Frederick
Street,
Kitchener,
Ontario
N2G
4N1
Dear
Sir,
Re:
Ref
M
Schmitt
dated
March
2,
1982
Please
be
advised
that
John
R
Charlton,
9
Blueridge
Court,
Guelph,
Ontario
has
been
a
teacher
at
the
Trillium
School
since
September,
1980.
This
is
a
special
appointment
and
is
to
last
for
2
years
only,
at
which
time
Mr
Charlton
will
return
to
his
regular
duties
with
the
Wellington
Co
Board
of
Education.
This
appointment
involves
road
travel
of
approximately
58
miles
per
day,
for
each
school
day
(78
days
during
1980).
Mr
Charlton’s
duties
of
employment
include
the
provision
of
in-service
education
for
certified
teachers
and
to
provide
History,
Geography,
Typing
and
Mathematics
programs
for
handicapped
students
that
are
individually
prepared
to
meet
their
needs.
Please
contact
me
if
greater
detail
is
required.
Yours
truly,
W
Moffatt
Program
Director
Reply
to
Notice
of
Appeal
In
reassessing
tax
as
aforesaid,
the
Respondent
relied,
inter
alia
upon
the
following
findings
or
assumptions
of
fact:
(a)
the
Appellant
during
the
period
under
appeal
was
employed
by
the
County
of
Wellington
Board
of
Education
(the
Board)
as
a
teacher;
(b)
the
Appellant
with
the
approval
of
the
Board,
agreed
to
accept
a
teaching
position
at
the
Trillium
School
in
Milton,
Ontario,
for
a
period
of
two
school
years,
commencing
September
1,
1980
and
concluding
June
30,
1982;
(c)
Trillium
School
is
operated
by
the
Ministry
of
Education
of
Ontario
(the
Ministry);
(d)
the
Ministry
and
the
Board
agreed
that
during
the
period
from
September
1,
1980
to
June
30,
1982,
the
Board
would
continue
to
pay
the
Appellant
his
regular
salary
and
the
Ministry
would
reimburse
the
Board
for
this
expense;
(e)
the
amount
of
$1,380.99
claimed
by
the
Appellant
as
travelling
expenses
represent
an
estimate
by
the
Appellant
of
the
cost
incurred
by
him
in
travelling
between
his
residence
and
Trillium
School
each
school
day;
(f)
the
amount
of
$1,380.99
was
not
an
amount
expended
by
the
Appellant
in
the
year
for
travelling
in
the
course
of
his
employment.
I
would
also
quote
paragraph
8(l)(h)
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63,
as
amended,
reads
as
follows:
8.
(1)
In
computing
a
taxpayer’s
income
for
a
taxation
year
from
an
office
or
employment,
there
may
be
deducted
such
of
the
following
amounts
as
are
wholly
applicable
to
that
source
or
such
part
of
the
following
amounts
as
may
reasonably
be
regarded
as
applicable
thereto:
(h)
where
the
taxpayer,
in
the
year,
(i)
was
ordinarily
required
to
carry
on
the
duties
of
his
employment
away
from
his
employer’s
place
of
business
or
in
different
places,
(ii)
under
the
contract
of
employment
was
required
to
pay
the
travelling
expenses
incurred
by
him
in
the
performance
of
the
duties
of
his
office
or
employment,
and
(iii)
was
not
in
receipt
of
an
allowance
for
travelling
expenses
that
was,
by
virtue
of
subparagraph
6(l)(b)(v),
(vi)
or
(vii),
not
included
in
computing
his
income
and
did
not
claim
any
deduction
for
the
year
under
paragraph
(e),
(f)
or
(g),
amounts
expended
by
him
in
the
year
for
travelling
in
the
course
of
his
employment.
Paragraphs
22
and
23
of
Interpretation
Bulletin
262R
(formerly
272)
read
in
part
as
follows:
Employees
in
General
—
Under
paragraph
8(l)(h),
an
employee
is
entitled
to
deduct
amounts
spent
in
the
year
for
travelling
provided
the
amounts
are
reasonable
in
the
circumstances
and
all
of
the
following
requirements
are
met:
(a)
He
is
ordinarily
required
to
carry
on
the
duties
of
his
employment
away
from
his
employer’s
place
of
business
or
in
different
places.
(b)
Under
the
contract
of
employment
he
is
required
to
pay
travelling
expenses
incurred
by
him
in
the
performance
of
the
duties
of
his
office
or
employment.
(c)
He
is
not
in
receipt
of
an
allowance
for
travelling
expenses
that
was
excluded
from
his
income
by
subparagraph
6(l)(b)(v),
or
(vii)
of
the
Act
(see
29
-
39
below).
(d)
He
has
not
claimed
any
deduction
for
the
year
under
paragraph
8(1)(f)
(expenses
of
certain
railway
company
employees
employed
away
from
ordinary
residence
or
home
terminal),
8(1)(g)
(salesmen’s
expenses)
or
8(l)(h)
(transport
employee’s
expenses).
23.
In
22(a):
(a)
“Ordinarily”
means
“customarily”
or
“habitually”
rather
than
“continually”
but
there
should
be
some
degree
of
regularity
in
the
travelling
that
the
employee
is
required
to
do.
(b)
“Required”
means
that
the
travelling
is
necessary
to
the
satisfactory
performance
of
the
employee’s
duties;
it
does
not
necessarily
imply
that
the
employer
must
order
him
to
travel.
(c)
“Place
of
business”
generally
is
considered
to
have
reference
to
a
permanent
establishment
of
the
employer
such
as
an
office,
factory,
warehouse,
branch
or
store,
and
also
to
a
field
office
at
a
large
construction
job.
The
appellant
explained
to
the
Court,
the
background
of
the
teaching
assignment
at
Guelph
[sic].
He
was
aware
when
entering
into
it
that
his
predecessors
in
the
post
had
left
because
of
a
difficulty
related
to
travel
costs.
Since
this
appellant’s
wife
had
taken
his
place
at
Wellington
during
the
two-year
period,
he
had
never
given
any
thought
to
moving
to
Guelph
himself.
He
was
now
back
teaching
at
Wellington,
and
during
the
critical
two-year
period,
he
had
retained
certain
limited
contacts
with
his
school.
It
was
clear
from
the
appellant’s
testimony
that
the
travelling
had
been
done
before,
and
in
order
for,
his
arrival
at
Guelph
for
the
opening
of
school
(usually
8:30
am),
and
to
come
home
after
school
had
terminated
(usually
3:45
pm).
The
appellant
stated
that
the
expenses
claimed
constituted
those
calculated
between
the
school
in
Milton
[sic]
(which
he
regarded
as
his
employer’s
place
of
business)
and
the
school
in
Guelph
rather
than
any
longer
distance
to
and
from
his
actual
residence.
The
appellant
agreed
that
he
did
not
“report”
each
morning
and
evening
to
the
school
in
Milton,
and
then
effectively
be
sent
by
that
school
to
Guelph.
It
was
clear
to
the
Court
that
there
was
no
reason
to
so
report,
he
had
no
particular
duties
or
responsibilities
to
the
school
in
Milton
during
the
period
under
review.
He
relied
heavily
on
his
interpretation
of
Bulletin
272
(now
272R)
and
its
suitability
to
his
case.
Counsel
for
the
Minister
made
reference
to
certain
jurisprudence
notably
James
C
Mahaffy
v
MNR,
[1946]
SCR
450,
Herman
Luks
v
MNR,
[1958]
CTC
345;
58
DTC
1194,
The
Queen
v
E
E
Diemert,
[1976]
CTC
301;
76
DTC
6187,
The
Queen
v
G
B
Wright,
[1981]
CTC
14;
81
DTC
5004.
In
essence
the
thrust
of
counsel’s
argument
was
that
irrespective
of
whether
the
appellant
appeared
to
meet
the
conditions
outlined
in
subparagraphs
(i),
(ii)
and
(iii)
of
paragraph
8(l)(h)
of
the
Act,
the
barrier
to
deductions
rested
in
the
main
body
of
that
section
since
the
amount
claimed
had
not
been
“expended
by
him
in
the
year
for
travelling
in
the
course
of
his
employment”.
Before
the
Court
can
realistically
dispose
of
the
appeal
on
the
basic
grounds
proposed
by
the
respondent
it
would
be
prudent
to
examine
two
points.
First
—
who
was
the
“employer”
of
Mr
Charlton;
and
second
—
where
was
that
employer’s
“place
of
business”?
If,
by
any
logic
at
all,
the
Ministry
can
be
determined
to
be
the
“employer”,
then
axiomatically
the
“place
of
business”
of
the
Ministry
is
Guelph,
and
the
appellant
has
no
basis
for
an
appeal
—
he
was
merely
travelling
from
his
home
to
his
employer’s
place
of
business
which
during
the
times
material
was
his
one
and
only
“work-site”.
Therefore,
in
order
for
the
appellant
to
pursue
the
matter
at
all,
Wellington
must
be
the
employer,
and
as
I
see
it,
that
is
a
correct
interpretation
of
the
facts.
The
known
and
accepted
“place
of
business”
of
Wellington,
was
in
Milton,
and
if
the
appellant
had
continued
to
report
to
that
as
a
“work-site”,
again
he
would
only
be
travelling
to
and
from
his
home,
a
non-deductible
expense.
As
I
see
it,
then,
the
only
basis
upon
which
Mr
Charlton
can
support
his
position
would
be
that
he
was
going
to
a
different
“work-site”
under
the
aegis
of
his
employer,
and
going
there
“‘to
carry
on
the
duties
of
his
employment”
subparagraph
8(l)(h)(i).
Those
duties
would
have
to
be
ones
which
were
assigned
to
him
by
Wellington
to
be.
performed
by
him
in
Guelph.
As
I
read
subparagraph
8(l)(h)(i)
of
the
Act,
it
would
be
a
precondition
that,
whether
“away
from”
Wellington,
or
“in
different
places”,
he
would
be
engaged
in
the
business
affairs
of
his
employer,
and
responsible
to
his
employer
for
the
performance
of
certain
tasks.
Based
on
his
reading
of
Bulletin
272,
Mr
Charlton
took
the
position
and
argued
it
very
rationally,
that
while
Wellington
did
not
“order”
him
to
travel
between
Milton
and
Guelph,
that
such
travelling
was
nevertheless
“necessary”
and
that
his
situation
fitted
that
particular
paragraph
precisely.
I
am
of
the
view
that
that
is
a
proposition
that
is
not
supportable
within
the
framework
of
the
legislation,
and
I
doubt
that
it
can
withstand
serious
scrutiny
even
within
the
words
of
the
Interpretation
Bulletin.
My
view
of
the
term
“required”,
is
that
it
does
entail
some
part
of
the
responsibility
for
the
“requirement”
resting
with
the
employer.
That
perspective
is
reinforced,
as
I
see
it,
by
the
recent
judgment
of
the
Federal
Court
of
Appeal
in
The
Queen
v
Henry
Cival,
[1983]
CTC
153;
83
DTC
5168,
where
at
158
[5171],
the
following
quotation
is
to
be
found:
I
am
prepared
to
assume
for
purposes
of
this
appeal
that
Mr
Cival
could
enter
into
an
individual
contract
with
his
employer,
covering
an
aspect
of
his
employment,
de-
spite
his
being
covered
by
the
collective
agreement,
so
long
at
least
as
the
contract
was
not
inconsistent
with
the
terms
of
the
agreement.
I
my
view,
the
arrangement
between
Mr
Cival
and
his
employer,
if
a
contract
at
all,
was
at
most
what
is
sometimes
called
a
unilateral
contract.
It
was
an
arrangement
under
which
his
employer
undertook
to
reimburse
him
on
a
mileage
basis
for
expenses
he
incurred
in
using
his
car
in
the
performance
of
his
duties.
I
do
not
interpret
the
arrangement
as
involving
a
promise
by
Mr
Cival
to
use
his
car
in
performing
his
duties
and
to
pay
the
expenses
out
of
his
own
pocket
in
return
for
an
undertaking
by
him
employer
to
reimburse
him.
To
put
it
another
way;
as
I
see
the
arrangement,
Mr
Cival
was
not
contractually
bound
to
use
his
car
in
doing
his
job
and
to
pay
the
expenses
involved;
if
at
any
time
during
1977
he
had
refused
to
use
his
car
for
this
purpose,
he
would
not
have
been
suable
by
his
employer
for
breach
of
contract.
It
follows
that,
to
adopt
the
words
used
in
subparagraph
8(
l)(h)(ii),
he
was
not
required
under
his
contract
of
employment
to
pay
the
expenses
incurred
by
him
in
using
his
car
in
the
performance
of
the
duties
of
his
employment.
This
is
enough
to
dispose
of
the
appeal.
I
might
also
add
that
irrespective
of
the
value
of
the
phrase
“it
does
not
necessarily
imply
that
the
employer
must
order
him
to
travel”
(a
quotation
from
Interpretation
Bulletin
272R),
I
do
not
accept
that
he
has
met
the
precondition
in
the
same
paragraph
of
the
Bulletin
“required
means
that
the
travelling
is
necessary
to
the
satisfactory
performance
of
the
employee’s
duties”.
He
simply
was
not
required
by
virtue
of
his
duties
to
travel
between
Milton
and
Guelph,
any
more
than
he
was
required
by
those
duties
to
remain
living
in
Milton.
The
choice
was
his
own
and
having
exercised
it,
the
result
must
flow
according
to
the
Act.
I
would
also
add
that
the
word
“required”
appears
not
only
in
subparagraph
(i)
of
8(l)(h)
but
also
in
subparagraph
(ii)
thereof,
and
it
would
be
difficult
to
assert
that
this
taxpayer
“‘under
the
contract
of
employment”
with
Wellington
“was
required
to
pay
the
travelling
expenses”,
at
issue,
even
if
he
managed
to
establish
that
they
were
incurred
“in
the
performance
of
his
duties”.
While
this
taxpayer’s
situation
and
circumstances
may
appear
unique
to
him,
they
are
not
so
easily
described
in
that
way
when
viewed
against
the
general
historical
record
of
the
facts
recited
in
other
similar
cases.
There
is
little
if
any
difference
between
his
own
situation
and
that
of
any
other
taxpayer’s
problem
of
finding
the
most
reasonable
and
practical
(sometimes
not
the
most
economical)
way
of
getting
to
and
from
work.
The
legislators
in
their
wisdom
have
chosen
to
leave
that
as
a
personal
expense,
and
it
would
be
treading
on
dangerous
grounds
for
this
Court
to
implicitly
expand
the
boundaries
so
clearly
outlined
in
the
law.
Having
said
that
I
must
deal
with
a
recent
case
from
the
records
of
the
Tax
Review
Board,
A
G
Zawadowski
v
MNR,
[1982]
CTC
2573;
82
DTC
1583
in
which
the
situation
is
not
completely
dissimilar
to
that
of
Mr
Charlton.
I
can
only
point
out
that
in
Zawadowski,
(supra)
it
had
been
the
Minister’s
position
that
there
was
a
series
of
different
employers,
and
when
it
was
determined
therein
by
the
presiding
member
that
there
was
only
one
employer,
the
issue
had
been
met.
I
would
also
note
that
the
appellant
Zawadowskïs
situation
is
described
by
the
presiding
member
as:
The
evidence,
in
my
view,
points
to
a
conclusion
that
St
Joseph’s
was
the
Appellant’s
employer
and
that
it
loaned
the
Appellant’s
services
to
the
other
Hospitals
at
which
the
Appellant
worked
and
was
required
by
St
Joseph’s
to
work.
St
Joseph’s
was
undoubtedly
content
to
loan
the
Appellant’s
services
to
the
other
Hospitals
because,
as
suggested
by
Dr
Lloyd,
(a),
the
position
occupied
by
the
Appellant
was
one
funded
by
the
Ministry
of
Health
for
purposes
of
advanced
medical
education,
and
(b),
the
Hospital
desired
to
have
the
status
of
a
teaching
Hospital.
In
the
instant
appeal
I
am
not
prepared
to
accept
that
Wellington
“loaned”
the
appellant
Charlton
to
the
Ministry,
in
the
sense
that
I
believe
that
word
could
be
used
in
A
G
Zawadowski,
(supra).
There
were,
as
I
read
Zawadowski,
(supra),
agreements
entered
into
between
that
appellant’s
employer
(St
Joseph’s
Hospital
and
the
other
hospitals)
with
regard
to
Zawadowski’s
services.
It
is
my
view
of
the
instant
appeal,
that
the
basic
arrangements
were
between
the
appellant
Charlton,
and
the
Ministry,
and
that
Wellington
merely
cooperated
with
and
agreed
to
those
arrangements.
The
concurrence
of
Wellington
(according
to
the
appellant’s
own
testimony)
was
necessary
primarily
in
order
to
continue
payroll
arrangements
by
Wellington
(for
later
reimbursement
from
the
Ministry)
and
to
ensure
pension
entitlement.
It
was
a
clear
objective
of
Mr
Charlton,
in
fact
mandatory
in
his
mind,
that
during
the
period
in
question
he
should
remain
on
the
staff
of
Wellington.
The
thrust
of
his
testimony
led
me
to
believe
that
other
options
or
arrangements
were
possible,
even
discussed,
but
discarded
by
him.
It
does
not
appear
to
me
that
Zawadowski
could
provide
any
comfort
to
this
appellant.
Mr
Charlton
was
not
required
by
his
contracts
of
employment
to
incur
the
expenses
claimed.
The
appeal
is
dismissed.
Appeal
dismissed.
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