Teskey
J.T.C.C.:
—
The
Appellant
elected
in
her
Notice
of
Appeal,
wherein
she
appealed
her
assessment
of
income
tax
for
1993,
to
have
her
appeal
heard
pursuant
to
the
informal
procedure.
Issue
The
issue
is
whether
$16,069.74
of
a
total
Canada
Pension
Plan
benefit
(“CPP
benefit”)
of
$18,198.00,
received
in
1993
is
not
taxable
income,
or
is
the
total
benefit
of
$18,198.00
taxable
income.
Facts
The
facts
are
not
in
dispute.
The
Appellant,
a
registered
nurse,
became
disabled
in
1992
within
the
terms
of
a
disability
policy
held
by
Confederation
Life
and
commenced
receiving
payments
thereon.
The
Appellant
executed
an
agreement,
dated
June
16,
1992,
with
Confederation
Life
entitled
“Agreement
Regarding
CPP
and
LTIP
Benefits”
(Exhibit
A-l).
This
agreement
provides
that
Confederation
Life
will
pay
and
continue
to
pay
to
the
Appellant
the
total
long
term
income
protection
benefits
while
her
application
for
disability
benefits
under
the
Canada
Pension
Plan
is
being
adjudicated.
Paragraph
(3)
thereof
reads:
(3)
to
reimburse
Confederation
Life,
if
I
am
awarded
CPP
or
QPP
disability
benefits,
the
amount
of
any
resultant
overpayment,
immediately
upon
request
and
in
a
lump
sum.
I
understand
that,
should
I
receive
a
CPP/QPP
Award,
I
hold
those
funds
in
trust
for
Confederation
Life;
On
December
3,
1993,
the
sum
of
$18,198.00
was
paid
directly
into
the
Appellant’s
bank
account
by
the
Canada
Pension
Plan.
The
money
was
discovered
by
the
Appellant
on
December
9,
and
she
informed
Confederation
Life
on
the
11th
of
December
of
the
deposit
and
the
amount
thereof.
Confederation
Life
advised
the
Appellant
to
do
nothing
until
they
advised
her
of
where,
when
and
the
amount
to
be
remitted
to
Confederation
Life.
By
letter
dated
January
11,
1994,
Confederation
Life
gave
the
Appellant
the
necessary
instructions
and
she
immediately
remitted
to
it
the
sum
of
$16,069.74,
as
requested
by
Confederation
Life.
The
Minister
of
National
Revenue
(the
“Minister”)
treated
the
total
CPP
benefit
of
$18,198.00
as
taxable
income
to
the
Appellant
in
the
year
1993.
Analysis
I
am
satisfied
that
the
June
16th,
1992
agreement
(Exhibit
A-l),
for
valid
consideration,
set
up
a
valid
trust
wherein
title
to
all
Canada
Pension
overpayments
were
vested
in
Confederation
Life.
It
cannot
be
said
that
$16,069.74
of
the
total
amount
of
$18,198.00
received
from
the
Canada
Pension
Plan
on
December
3,
1993,
that
the
Appellant
had
a
beneficially
interest
or
right
to
that
amount.
She
received
this
sum
subject
to
the
fiduciary
obligation
to
pay
it
to
Confederation
Life.
The
money
was
Confederation
Life’s,
it
was
for
their
benefit
and
not
for
the
Appellant’s
benefit.
It
cannot
be
taxable
in
the
Appellant’s
hands.
The
Appellant
was
a
simple
conduit
for
the
amount
of
the
overpayment,
which
she
was
obligated
to
pay
to
Confederation
Life
when
calculated.
The
appeal
is
allowed
with
costs,
and
the
assessment
is
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
the
taxable
income
for
the
year
1993
shall
be
reduced
by
the
sum
of
$16,069.74.
Appeal
allowed.
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