Claude Lamothe v. Her Majesty the Queen, [1996] 3 CTC 2423 (Informal Procedure)

Bowman J.T.C.C.: — In these appeals, which concern assessments for the 1991, 1992 and 1993 taxation years, the issue is the Minister of National Revenue’s refusal to allow the appellant a tax credit for a severe and prolonged mental or physical impairment pursuant to sections 118.3 and 118.4 of the Income Tax Act.

Mr. Lamothe is suffering from a psychiatric condition known as [translation] “an affective bipolar disorder”. The question is whether this condition is a severe and prolonged impairment the effects of which are such that Mr. Lamothe’s ability to perform a basic activity of daily living is markedly restricted.

Subsection 118.4(1) reads as follows:

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

(a) an impairment is prolonged where it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months;

(b) 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;

(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 or 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.

Before beginning my analysis of Mr. Lamothe’s mental state, I must discuss the rules which in my opinion should be applied in such cases. It is clear that the tests listed in section 118.4 are very narrow and leave the Court little room for manoeuvre. Nevertheless, in three oral judgments I recently rendered in St. John’s, Newfoundland, I set out the approach which I take in such cases.

In Lawlor v. R., [1996] 2 C.T.C. 2005 (T.C.C.), at page 6 [of original], I said:

I should also say something about approach that this Court should take in these disability cases. They are small cases. To the taxpayer they mean a fair bit, and I’ve seen many of them and I can say that it breaks my heart to see the state some people are in and sometimes they just don’t make out their case. But I think that is important that this Court bear in mind the very restrictive nature of section 118.4, and to the extent that we can, that we alleviate against that strictness and that we approach the matter with a degree of compassion and understanding that achieves the objective of this section.

In Hillier v. R., [1996] 2 C.T.C. 2004 (T.C.C.), I said at page 4 [of original]:

As I’ve said before, the Department of National Revenue operates under certain difficulties. They seldom see the people, nor do they see the human tragedy that often impels people to claim these tax credits. I think it is important that we, in interpreting the section, do so in a manner that is consonant with the object, the purpose for which it is there, and to read it narrowly or technically I think defeats its purpose.

In Noseworthy v. R., [1996] 2 C.T.C. 2006 (T.C.C.), I said at page 7 [of original]:

I mentioned in the previous case and I think I should mention it again, the approach that I take in these disability tax cases. The statute is very restrictive. The tests have been narrowed even more drastically with the recent amendments. Yet I think it is important that this court, who for the first time, either sees the taxpayer or has some appreciation of the human aspects of disabled people, that we approach it to the extent that we can with a measure of compassion and understanding. I say this without meaning in any way to be critical of the Department of National Revenue. They’ve got their job to do but I have mine too. I think that this is consistent, not only of my own view of the matter, but I believe it’s consistent with the decision of the Court of Appeal in Taylor which dealt with an earlier version of the statute of course. As I mentioned to Mr. Bundy in the course of his very able argument, these are always tough judgment calls but in this one I feel that, in the interest of giving effect to what I believe to be the object and spirit of this section and of giving effect to what I believe to be the humane and compassionate approach that we should take in these cases, it is in the interest of justice that the appeals be allowed.

It must be borne in mind that this appeal is, so far as I know, the first in this Court to deal with mental impairment. In the other cases which I heard the issue was physical impairment. The Court was then able to observe the appellants and hear their own descriptions of their physical condition. In those cases the opinions of physicians are less relevant because the Court can directly observe the appellants and draw its own conclusions itself.

Here the appellant did not testify. In an ordinary case I would have drawn an unfavourable inference from this fact, but I am not prepared to do so here for several reasons. First, according to the testimony of the two psychiatrists, who testified for the appellant, Mr. Lamothe was not able to offer significant testimony. I accept the psychiatrists’ testimony. It would undoubtedly have been traumatic for him to be required to testify. In any case, I would not have been able to determine his mental state on the basis of a brief appearance in the witness box.

The reports. of the two psychiatrists must be considered. Dr. Hillel described his condition as follows:

This is to certify that the subject has been under my care since March 4, 1982 for a bipolar affective disorder. The progressive loss of his ability to work and to be attentive led to an acknowledgment of his disability by the Quebec Régie des Rentes in 1991.

However, his ability to function independently continued to diminish:

- lack of attention and concentration preventing any productive or recreational

activity;

- his stress is such that he has to be accompanied in order to make a bank

deposit or withdrawal;

- in some circumstances he may even have difficulty expressing himself and making himself understood by the person to whom he is speaking;

- his tolerance of effort is clearly reduced: he has to pay someone to do his housework and shovel snow in winter at the entrance to his home;

- he neglects or does not have the strength to make meals and must often eat

out or order in prepared meals: naturally, this is costly for him;

- his medication often causes him to have diarrhoea, which increases the quantity of washing he has to do (or have done for him).

In view of all these factors, it seems logical that the credits claimed by the subject for his disability should be awarded to him for 1991 and the subsequent years.

[Translation.]

In the disability tax credit certificate dated February 22, 1994, Dr. Hillel certified that the impairment was permanent.

The questions put and the answers given by Dr. Hillel were as follows:

III. Diagnosis of disabling condition outlined in Part II above and any other associated conditions causing the marked restriction in ability to perform basic activities of daily living.

Bipolar Affective Disorder

- periodic mood swings and variations in psychomotor activity

- difficulty in attending and concentrating

- difficulty containing emotions and “managing” stress

IV. Description of how the effects of the disabling condition outlined in Part II above and any other associated conditions cause the individual to be markedly restricted in his or her ability to perform basic activities of daily living. See “Eligibility Criteria Guidelines” on the attached sheet.

- tendency to fatigue

- needs frequent help performing household tasks

I consider that the handicapped person whose name appears above meets the eligibility tests indicating that he has a prolonged impairment which markedly restricts his performance of basic activities of daily living all, or almost all, of the time.

[Translation.]

Dr. Hillel also completed the disability questionnaire because Mr. Lamothe was unable to do it.

In oral testimony Dr. Hillel said that when in a manic or depressive phase Mr. Lamothe is unable to think. Such mood swings happen every day and several times a day. He also added that the medication prescribed for him, namely Lithium (medication prescribed for manic-depressive people), Tegretol (anti-seizure medication), Rivotril and Dalmane, do not have any effect on Mr. Lamothe. The only effect of such medication is that without them he would be in an institution. Even with the medication, his mental condition is such that he cannot think or concentrate normally.

Mr. Lamothe’s condition is characterized by rapid mood swings. In a single interview he could be in an excellent frame of mind and then suddenly begin to cry.

Dr. Duguay, a senior psychiatrist at the Montréal General Hospital, also testified. Dr. Duguay was an expert with impressive qualifications. His full expert report reads as follows:

At your request the undersigned made a psychiatric assessment of Mr. Claude Lamothe on December 11, 1995 for the purpose of issuing a medicolegal opinion. The purpose also was to assess the extent of Mr. Lamothe’s disability or impairment pursuant to the tests laid down in the Income Tax Act, in particular section 118.4 regarding severe and prolonged impairment.

The undersigned examined the medical report of Mr. Claude Lamothe’s attending psychiatrist, Dr. Jean Hillel, dated August 30, 1995 and the statutory provisions relating to the above subject.

Statement of problem

The subject is a postman 57 years old, divorced and the father of four children, and had worked for Canada Post since 1970: he said he stopped all work in 1990, as he exhibited the symptoms of bipolar affective disorder for which eventually, from March 1982 onwards, he was treated by the psychiatrist Jean Hillel.

According to his account Mr. Lamothe had always enjoyed good health until the day on which he was involved in an accident on Boulevard Métropolitain, when he said his truck turned over and caused him to have a psychotic reaction of sufficient seriousness to lead him to be absent from work intermittently for nearly three years and undergo a psychiatric assessment by Dr. Lionel Béliveau, who gave him an A.P.D. After several attempts to return to work he was unable to continue and ceased work completely in 1990.

He apparently developed a bipolar affective disorder characterized by significant depressive states with thoughts of suicide and also by periods of hyperactivity and aggressiveness. Despite taking medication that included Tegretol, Lithium, Rivotril and Dalmane, he was declared completely disabled in 1990.

While having treatment from the psychiatrist Dr. Hillel, he apparently did not respond to medication and continued to exhibit a state of total disability characterized specifically by a serious depression with thoughts of suicide, significant difficulty in concentration and after 1991 signs that his condition was deteriorating as he was no longer able to make his own meals and run his own errands and needed help feeding himself. Further, he was unable to look after himself and deposit his cheques in the bank and had to be accompanied because of significant difficulty in concentrating and understanding the nature of even simple transactions required in this connection. He apparently continued to experience significant difficulty concentrating over the years so that he had trouble making himself understood by those he spoke to and became entirely dependent both for the management of his affairs and for the cleaning of his living quarters, and for the removal of snow from the entry to his residence in winter, even being unable to prepare meals or run errands for food and at times suffering from enuresis.

Personal history

Mr. Lamothe was born in Ste-Thérèse, the third in a family of nine children. His father worked as a labourer in a lumber yard and was described as a gentle person with whom the patient was on good terms. His mother died in 1990 and was described as a somewhat authoritarian person. The patient nevertheless had a happy childhood with his family. He completed the seventh or eighth grade and worked in a lumber yard from the age of 14. He apparently married at age 25 and the couple had four children: during this time he took a job as manager of a bowling alley. In 1970 he became a postal employee, working as a truck driver. He apparently enjoyed this work and always did a good job, according to him, until the point at which he had his truck accident, which apparently resulted in a depressive reaction leading eventually to a chronic bipolar disorder which rendered him completely unfit for work in 1990. His wife was unable to cope with his disability and his children also abandoned him, leaving the patient almost isolated.

Psychiatric examination

The patient in question is somewhat overweight and seems older than his age; he wept copiously during the interview. His statements were coherent but the subject visibly suffered from serious difficulty concentrating, being unable to recall questions put to him a few minutes before and finding it impossible to state exactly the dates and names of medication and the nature or date of important events relating to his condition. The subject mentioned that he often had thoughts of suicide though he could not be specific as to how he would proceed.

Conclusion

It appeared that this patient is suffering from a serious chronic state of depression which has resisted all the classic treatments for such a condition. We feel he is in fact completely incapable of performing any gainful employment whatever and that his condition of regression and dependence is such that it creates a severe and prolonged impairment affecting the basic activities of daily living, in particular concentration, ability to feed oneself and ability to hear and speak so as to be understood in relatively uncomplicated transactions. In these circumstances we feel that Mr. Claude Lamothe meets the requirements of section 118.4 as to severe and prolonged impairment.

[Translation.]

In his oral testimony Dr. Duguay agreed with Dr. Hillel’s conclusions. He based his findings on a psychiatric examination lasting one hour. He explained to the Court the tests which he administered to the appellant in order to assess his mental condition. It was clear that the appellant had serious problems concentrating, thinking, using his memory and understanding simple ideas. In such a case the question is clearly one of degree. Everyone has problems thinking, concentrating, perceiving and using their memories from time to time. However, it is quite normal to have mood swings from time to time without suffering from a mental impairment described in section 118.4. In the instant case the Court is persuaded that Mr. Lamothe’s problems so far exceed normal limits that he falls within the narrow boundaries of this section.

The respondent did not call any expert witnesses. I accept the opinion of the two experts who testified for the appellant. On the evidence before the Court it is clear that the appellant is suffering from a severe and prolonged impairment. His ability to perform activities of daily living (such as perceiving, thinking and using memory) is markedly restricted even with medication.

The appeals are accordingly allowed with costs and the assessments for 1991, 1992 and 1993 referred back to the Minister for reconsideration and reassessment on the basis that the appellant is entitled to the mental impairment credit pursuant to sections 118.3 and 118.4 of the Income Tax Act.

Appeal allowed.