Revusky v. R., [1997] 2 CTC 2443

Bell T.CJ.:

The Appellant, who has a doctorate in psychology and is a professor at Memorial University, appealed from an assessment in respect of his 1993 taxation year. The reassessment disallowed $8,842.13 of the amount of $20,696.48 claimed by him in respect of medical expenses incurred on behalf of his adult son.

The issue is whether the Appellant is entitled to deduct the sum of $8,842.13 in respect of a trip to Spain to bring his son back to St. John’s, Newfoundland and then a trip to Boston for medical attention as medical expenses under subsection 118.2(2) of the Income Tax Act (“Act”).

FACTS

The Appellant testified that his son, Jonathan, was immobilized in Spain due to severe depression and was unable to travel alone to Newfoundland for necessary medical treatment. When he learned of his son’s condition the Appellant went by special airfare to Spain. He was unable to return as soon as he wished because of Christmas traffic. He said that Jonathan’s condition was terrible, that he had never seen him like that and that he was terrified of the possibility of suicide.

Jonathan, who is now 31 years of age, has completed all work but a dissertation for a doctorate in Economics from the University of California at Los Angeles. Because of the inability to return sooner, the Appellant and his son spent two weeks in Spain before returning to St. John’s. The Appellant said that he did not seek treatment in Spain because he would not have known where to go and that two or three sessions would not have been productive. Upon return to St. John’s Jonathan was in the brief care of a doctor before departing with his father for the McLean hospital at Harvard University in Boston, Massachussetts. There, he received treatment over a two month period during which the Appellant rented an apartment to house him and his son. He explained that the apartment was far cheaper than a hotel or staying at the hospital. He explained that he did not hire an attendant to accompany his son because that would have been more expensive and his son would have felt that he had been abandoned by his father. He stated that there was no other reason for travelling to Boston except to receive care for his son.

The expenses claimed by him are described as follows:

Travel to/from Spain to get dependent son - $3,755.44

Therapy treatment for son - $7,685.74

Expenses re: travel in Boston - $8,441.69

Miscellaneous medical expenses - $543.21

Medical insurance - $270.40

Total - $20,696.48

The Minister, by reassessment, disallowed the entire cost of the Spain trip namely $3,755.44 and $5,086.69 of the Boston trip totalling the aforesaid $8,842.13.

Appellant’s counsel entered in evidence the following documents: (a) copy of a letter of March 9, 1994 not addressed to anyone signed by Dr. C.F. Mellor, MD, PHD, FRCP(C), certifying that he saw Jonathan Revusky as a patient on December 29, 1992 and January 6, 1993. It stated that the Appellant had discussed Jonathan’s illness with him beforehand and he had advised the Appellant to go to Spain to bring Jonathan home to St. John’s. He further stated that following his assessment it was decided that Jonathan should go to Boston for treatment and that he had advised the Appellant to accompany him to the hospital there.

(b) letter of November 4, 1994 signed by Mark Schoenderg, Ed. D., licensed psychologist addressed to Revenue Canada advising that the Appellant had telephoned him in February or March 1993 for advice regarding Jonathan’s depression. Dr. Schoenderg stated that he had advised the Appellant to take Jonathan to the McLean hospital, a teach- ing hospital for Harvard Medical School because there was a great shortage of practitioners in St. John’s and there was no one who specialized in intensively treating depression.

(c) copy of a letter dated January 8, 1995 to Revenue Canada signed by Gary Martin, MD of Denver, Colorado. He stated that he was a psycho analyst who had treated Jonathan, confirming that he had serious depression and at that date still had an extremely severe psychiatric disorder to the point that he could not keep a job. He also stated that Jonathan was exceedingly resistant to acceptance of treatment. He stated that from what he had seen Jonathan was incapable of travelling by himself when his depression was at its peak in Spain and that it was reasonable for the Appellant to be concerned about the possibility of suicide both in Spain and in Boston. He stated that it would have been worse than foolhardy for the Appellant to leave Jonathan alone in Boston during his depression and the Appellant’s presence was also necessary to keep Jonathan going for treatment.

Respondent’s counsel entered as an exhibit copy of a page from the Appellant’s income tax return detailing the claimed expense of $20,696.48. The expenses for the Spain trip were $1,651.00 respecting a return trip to Spain for the Appellant, $1,187.00 for airfare for Jonathan from Spain to St. John’s, automobile expenses in Spain of $557.44, and living expenses in Spain of $360.00, totalling $3,755.44. The expenses with respect to the trip to Boston included $500.00 for airfare which was provided on aeroplan points described by the Appellant as the “lowest possible value” representing $250.00 return trip for each of him and his son. The other amounts included apartment rental, expenses and unreimbursed medical expenses and medical and dental insurance expenses. Respondent’s counsel advised the Court that there was a total of approximately $1,000.00 in expenses in respect of which no receipts were provided.

Appellant’s counsel submitted that the claim made was a “common sense claim” and that the certain expenses qualified under paragraphs 118.2(2)(g) and (A) as being reasonable on a common sense basis. Subsection 118.2(1), which sets out a formula for computation of a medical expense credit, requires, as part of that formula, that the medical expenses be “proven by filing receipts therefor” with the Minister. Subsection 118.2(2) provides that a “medical expense” is an amount paid, inter alia,

(g) to a person engaged in the business of providing transportation services, to the extent that the payment is made for the transportation of

(i) the patient, and

(ii) one individual who accompanied the patient, where the patient was, and has been certified by a medical practitioner to be, in- capable of travelling without the assistance of an attendant from the locality where the patient dwells to a place, not less than 40 kilometres from that locality, where medical services are normally provided, or from that place to that locality, if

(iii) substantially equivalent medical services are not available in that locality,

(iv) the route travelled by the patient is, having regard to the circumstances, a reasonably direct route, and

(v) the patient travels to that place to obtain medical services for himself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services;

and

(h) for reasonable travelling expenses (other than expenses described in paragraph

(g) incurred in respect of the patient and, where the patient was, and has been certified by a medical practitioner to be, incapable of travelling without the assistance of an attendant, in respect of one individual who accompanied the patient, to obtain medical services in a place that is not less than 80 kilometres from the locality where the patient dwells if the circumstances described in subparagraphs (g)(iii), (iv) and (v) apply;

Counsel submitted that the full airfare claimed for the Appellant’s return trip to Spain and Jonathan’s trip from Spain to St. John’s should be allowed, it being reasonable to allow the full expense of an attendant in Spain flying with Jonathan to St. John’s and then returning to Spain. He also submitted that the travel expenses in Spain were reasonable having regard to the Appellant’s explanation about not being able to return quickly to St. John’s. He argued that there were no support services in Spain and that it was not appropriate to leave Jonathan alone there in that he was immobilized. He referred to Dr. Mellor’s letter with particular reference to his words,

I had advised him to go to Spain to bring Jonathan home to St. John’s.

and

...I advised that his father should accompany him to the hospital.

in Boston.

Counsel then referred to paragraph 4 of the Reply to the Notice of Appeal in which the Respondent admitted the facts stated in paragraphs 4, 5 and 6 of section B of the Notice of Appeal. By this admission, the Respondent acknowledged that the Appellant’s presence in Boston with Jonathan was necessary and that expenses were incurred to assist him with the necessary medical treatment. The Minister also thereby acknowledged that the amount paid for lodging in Boston was not solely for the sake of conve- nience and that the only reason the Appellant was in Boston was to accompany his son for expert medical treatment needed by him.

Respondent’s counsel submitted that paragraph 118.2(2)(g) referred to an individual accompanying a “patient” and that Jonathan was not a patient at that time. He also asserted that the patient must have been certified by a medical practitioner to be incapable of travelling without the assistance of an attendant before the travel. He said that the Appellant contacted the doctors who had written letters after Jonathan’s return to St. John’s. He made some point of the fact that Dr. Penney, who had treated Jonathan in St. John’s, did not certify that he was not able to travel and pointed out that there was no letter from Dr. Penney. He also argued that there was no evidence that “substantially equivalent medical services” were not available in Spain.

I do not accept Respondent’s argument that Jonathan is not a “patient”. I regard that word as identifying the person who was in urgent need of medical treatment and who formally became a patient on his return to St. John’s. Further, I find Doctor Mellor’s letter satisfies the requirement in paragraph 118.2(2)(g)(ii) that Jonathan had been certified by a medical practitioner to be incapable of travel without the assistance of an attendant. Subparagraph

(ii) reads:

one individual who accompanied the patient where the patient was and has been certified by a medical practitioner to be incapable without the assistance of an attendant.

It was problematic, at best, for a medical practitioner in Spain to have established a doctor-patient relationship with Jonathan and then to have certified that he was incapable of travel. I agree with the Appellant’s submission that a common sense approach must be taken in the interpretation of this paragraph. The words “and has been certified by a medical practitioner to be” can refer to a certification after the patient’s travel. The medical expenses provision must have rules, as it does have. However, those rules must be interpreted to make sense in situations which don’t fit the norm and where relief is intended. A Canadian taxpayer who must return to his country should not be disadvantaged by an overaggressive attempt to deny the tax benefits that would be readily available were he to fall ill in his own land.

I also find that “substantially equivalent medical services” were not available in Jonathan’s locality in Spain. Firstly, there is a matter of language in which medical assistance would be sought and in which it would be delivered. This case does not deal with something like a broken limb, but rather with a mental and psychological condition in respect of which the subtlety of a patient’s language must be comprehended and analyzed by a person familiar with the patient’s living circumstance.

Also, I find the return fare of the Appellant and the one way fare of Jonathan to be reasonable travel expenses for the return of Jonathan to St. John’s. It would be absurd to conclude that the Appellant’s expenses to Spain for the purpose of bringing his son home would not be “reasonable travel expenses” incurred by the individual who accompanied the patient.

Further, I accept the Appellant’s evidence with respect to the unavailability of airplane travel and accommodation in Spain whiled awaiting flight departure. The expenses thereby incurred are reasonable travel expenses.

Obviously, the Respondent agreed that some expenses in respect to the Boston trip were deductible, namely to the extent of $8,842.13, leaving the sum of $5,086.69 disallowed. I find that amounts paid and proven by filing receipts with the Minister are deductible. Any amounts not so supported both in respect of the Spain trip and Boston trip will not be deductible. Other expenses which are not deductible are the following:

(a) $500.00 respecting Aeroplan travel to Boston for the Appellant and his son; and

(b) the medical and dental insurance, insufficient details of same having been furnished to the Court.

The appeal is allowed in accordance with these Reasons for Judgment. Appellant’s solicitor indicated clearly that if expenses were not proven by receipts filed with the Minister, they could not be allowed. This is a mechanical matter which can be dealt with on reassessment, preferably by agreement of the parties.

Respondent’s counsel commenced argument on the awarding of costs in this matter and advised the Court that a written offer of settlement had been made to the Appellant. I have no doubt that his raising this matter was not intended to be inappropriate, but I do not think that disclosure of that type of information should be made before the Court’s decision. According, I ask counsel to advise the Court before August 16, 1996 of the amount of Appellant’s claim which was not proven by filing receipts and I direct the arrangement, if desired, of a conference call before August 23, 1996 to deal with costs. I shall issue judgment after that is complete. And that concludes my Reasons for Judgment.

Appeal allowed.