Ficiur v. R., [1999] 4 CTC 2570 (Informal Procedure)

Beaubier T.C.J. (orally):

This appeal pursuant to the informal procedure was heard at Calgary, Alberta, on June 8, 1999. The Appellant was the only witness.

Paragraphs 4 to 11 inclusive of the Reply to the Notice of Appeal read: 4. In computing income for the 1995 and 1996 Taxation Years, the Appellant deducted the amounts of $1,735.47 and $1,703.46 respectively as motor vehicle travel expenses.

5. In reassessing the Appellant for the 1995 and 1996 Taxation Years, the Minister of National Revenue (the “Minister”) decreased the amounts of motor vehicle expenses referred to in paragraph 4 above as follows:

TAXATION
YEAR	CLAIMED	ALLOWED	DISALLOWED
1995	$1,735.47	$200.25	$1,535.22
1996	1,703.46	52.49	1,650.97

6. In response to the Reassessments referred to in paragraph 5 above, the Appellant served on the Minister Notices of Objection dated February 25, 1998 with respect to the 1995 and 1996 Taxation Years.

7. In response to the Notices of Objection served by the Appellant for the 1995 and 1996 Taxation Years, the Minister confirmed the Reassessments by Notification of Confirmation dated June 8, 1998.

8. In so reassessing the Appellant, the Minister made the following assumptions of fact:

(a) the Appellant was, at all material times, employed by Prairie Rose Regional Division No 8 (the “Employer”);

(b) as an employee of the Employer, the Appellant was assigned to the Winnifred Hutterite Colony School;

(c) the Appellant’s ordinary place of residence in the 1995 and 1996 Taxation Years was Bow Island, Alberta, (the “Home”);

(d) the Appellant calculated 11,580 and 11,758 as kilometres driven in the performance of his duties of an office or employment in 1995 and 1996 respectively;

(e) of the total amount of travel referred to in subparagraph 8(d) above, 1,372 and 686 kilometres represents the Appellant’s travel in attending monthly meetings in the 1995 and 1996 Taxation Years respectively;

(f) the Appellant received a non-taxable allowance in the amount of 30 cents per kilometre in respect of the travel referred to in subparagraph 8(e) above;

(g) of the total amount of travel referred to in subparagraph 8(d) above, the remaining 10,208 and 11,072 kilometres represents the Appellant’s travel from the Appellant’s Home to the Winnifred Hutterite Colony School (hereinafter the “School’’);

(h) the Appellant incurred travel expenses in the performance of his duties of an office or employment during trips between his Home and the School;

(i) the Appellant was required to pick up the School’s mail at Senator Gershaw School in Bow Island and deliver it to his place of employment at the School;

(j) the Appellant was required to perform the duties referred to in subparagraph 8(i) above on a weekly basis;

(k) the Appellant did not receive an allowance or reimbursement from the Employer with respect to the travel referred to in subparagraph 8(h) above;

(1) the School is located approximately 30 kilometres from the Appellant’s Home;

(m) one trip per week for a period of 9 months was travel by the Appellant from Senator Gershaw School in Bow Island to the Employer’s place of business in the performance of his duties of an office or employment in each year;

(n) of the total amount of travel referred to in subparagraph 8(h) above, the Appellant travelled no more than 1,080 kilometres in performing his duties of an office or employment with the Employer in each year;

(o) during the years under appeal, the Appellant did not maintain a mileage log book, record of appointments or any other books and records to ascertain the nature of his travels and the mileage travelled for business purposes;

(p) travel in excess of 1,080 kilometres in each year between the Appellant’s Home and his Employer’s place of business where the Appellant performed his duties is personal; and

(q) the Appellant is entitled to a deduction for motor vehicle travel expenses for travel in the performance of his duties of an office or employment based on no more than 1,080 kilometres in each of the 1995 and 1996 Taxation Years.

B. Issues to be Decided

9. This issue is whether the Appellant is entitled to a deduction for motor vehicle travel expenses based on more than 1,080 kilometres travelled in the performance of his duties of an office or employment for the 1995 and 1996 Taxation Years.

C. Statutory Provisions, Grounds Relied on and Relief Sought

10. He relies on, inter alia, section 3, subsections 8(2) and 8(3) and on paragraph 8(1 )(h. 1 ) of the Act as amended for the 1995 and 1996 Taxation Years.

11. He submits that the Appellant is entitled to a deduction for motor vehicle travel expenses in the performance of his duties of an office or employment based on no more than 1,080 kilometres pursuant to paragraph 8( 1 )(h. 1 ) of the Act, and is therefore, prohibited by subsection 8(2) of the Act from claiming expenses in excess of those based upon 1,080 kilometres, as set out in Schedule “A”.

Assumptions 8(a), (b), (c), (d), (e), (f), (g), (h), (1), (k), and (1) are true or were not refuted.

The Appellant was at all material times the school principal at the school which was located on the Winnifred Hutterite Colony (the colony). The school premises was owned by the colony. The Appellant received all of his school mail and school material by picking it up at the Senator Gershaw School in Bow Island and delivered all of his school mail and material there.

Respondent’s counsel argued that the Senator Gershaw School was equivalent to a postal drop. However, it was more than that. At the very least, it was the Appellant’s employer’s only business premises to which the Appellant had access during the school week. It was where he received his instructions from his employer respecting his duties of employment. The Appellant carried these duties out in part when he picked up and delivered material and mail from and to the Senator Gershaw School, when he did his teaching at the Winnifred School and in other parts when he did other acts and activities on the instructions of his employer.

The Appellant’s residence in Bow Island was about five blocks from the Senator Gershaw School. Senator Gershaw School was about thirty kilometers from the Winnifred School. Based on the evidence, there was only one courier delivery by the employer to Senator Gershaw School each week. This required between one and two pick ups by the Appellant each week depending on what came in for him from different sources. It also required one trip each week when the Appellant delivered his mail and material to the Senator Gershaw School for the courier. These trips were between school premises, that is to say, between his work places. One was where he taught and wrote reports; the other was where he received instructions and materials and where he delivered his reports and materials. He was required to be at each every school week as part of his duties of employment. He was also required to take the mail and materials to and from both schools as part of his duties of employment. He had to pay his costs to carry out these duties. Both schools were places of employment of the Appellant. The evidence is clear that the Appellant could not reside on the Colony near the Winnifred School. Thus, while at first glance it would seem that a one-way trip was sufficient, each trip one way required a return the other way between the schools since the material came to and from Senator Gershaw School, but it was required to go from and to Winnifred School. As a result, a round trip was implicit every time. The evidence is that at least two rounds trips were required each week. At times, a third round trip was also required but the number of these third trips is not in evidence. The onus is on the Appellant to establish that evidence required, and he has not done so. There were four or five school days in each school week. The employer required the Appellant to make round trips for two days each week between the schools as part of the duties of his employment in both 1995 and 1996. The Appellant is entitled to deduct the cost of travel for four times the oneway trips totaling 1,080 kilometers each year that were allowed by the Respondent as stated in assumptions 8(p) and (q).

His employer allowed him 30 cents per kilometre which is reasonable. Thus the following deductions are allowed: 1995, 4,320 kilometres times 30 cents equals $1,296; 1996, 4,320 kilometres times 30 cents equals $1,296; total $2,592.

The Appellant was originally allowed a total of $252.74 and claimed $3,438.93, a difference of $3,186.19. He has won in excess of half of the difference and therefore he is entitled to receive his costs which amount to his disbursements to prosecute his appeal and conduct it in Calgary.

The appeal was called at 9:30 a.m. and heard at approximately 10:00 a.m. This required an overnight stay in Calgary since it is approximately two hundred kilometres from Bow Island to Calgary. In addition, he incurred his disbursements for photocopying, postage, and phone calls to prosecute the appeal. He is awarded $350 for his out-of-pocket disbursements.

Signed at Ottawa, Canada this 27 day of September, 1999.

Appeal allowed in part.