The Assistant Chairman:
1 This is the appeal of Dr Henry T Wyatt from an income tax assessment in respect of the appellant's 1970 and 1971 taxation years.
2 By notices of reassessment dated September 14, 1973 the Minister added to the appellant's income for 1970 and 1971 amounts of $7,520 and $18,613.50, respectively, which represented the appellant's earnings from the University of Alberta, on the ground that the appellant's primary occupation in 1970 and 1971 was not teaching and therefore the provisions of the Canada-UK Tax Agreement with regard to teachers were not applicable (Department of National Revenue's letter, dated September 21, 1973, on file). The appellant filed his notices of objection on December 3, 1973. The Minister confirmed the assessments on May 23, 1974 and the appellant filed his notice of appeal on August 6, 1974. In the notice of appeal the appellant contends that not only his primary but his sole occupation during 1970 and 1971 was that of a teacher at the University of Alberta.
3 In his reply to the notice of appeal the respondent contends that the appellant's purpose in entering Canada on August 14, 1970 was not to teach at a university for a period not exceeding two years; that the appellant was teaching at the University of Alberta for more than two years after his entry into Canada on August 14, 1970; and that the appellant's primary occupation in 1970 and 1971 was the adminis tration and practice of medicine in an ophthalmology clinic at the Charles Camsell Hospital in Edmonton.
4 In deciding the extended issue now before the Board, it is first necessary to determine whether the appellant was in fact teaching at a university in 1970 and 1971 or whether he was practising medicine.
5 From the evidence adduced, particularly the 23-month contract of employment signed by the appellant on June 3, 1970 (Exhibit A-1), and from the explanatory letter from Dr Boyd, the head of the Ophthalmology Department of the University of Alberta, dated December 10, 1973 (Exhibit A-8), I have no difficulty in accepting the fact that the appellant, during the years under appeal, was teaching undergraduates at the University of Alberta in the capacity of Associate Professor on a full-time basis. I am also satisfied that the appellant had the required qualifications and that he did also teach postgraduate residents of the Charles Camsell Hospital who wanted to specialize in ophthalmology. Dr Boyd testified that most postgraduate medical specialties can only be taught by actual practice with patients and by demonstrating on them the various techniques used in the specialty, and that ophthalmology cannot be taught without the teacher practising ophthalmology in the process of teaching. Dr Boyd added that an ophthalmology clinic was set up at the Charles Camsell Hospital, which was affiliated with the University of Alberta, and that the appellant taught there in 1970 and 1971. The evidence also shows that the appellant was not allowed to practise ophthalmology other than in connection with his teaching at the clinic. In my opinion, the amount of income earned by the appellant from his teaching practice in ophthalmology is not material to the issue in this appeal.
6 On the basis of the evidence, I conclude that the appellant was in fact teaching at the University of Alberta in the years pertinent to this appeal.
7 The second qquestion is whether the appellant, as an Associate Professor teaching in a Canadian university, qualifies for the tax exemption allowed by Article 18 of the Canada-UK Tax Agreement.
8 In 1970 the appellant was a resident of the United Kingdom and had applied to teach at the University of Alberta. The effective date of the appellant's appointment as Associate Professor at the University of Alberta was August 1, 1970 and was for a probationary period terminating June 30, 1972 (Exhibit A-1). The appellant came to Canada with his family and commenced teaching at the University. By a staff memorandum dated December 6, 1971 (Exhibit A-5), the appellant was informed that he had been granted tenure at the University of Alberta effective July 1, 1972. The appellant then decided to stay in Canada and continue to teach ophthalmology at the University of Alberta.
9 Counsel for the appellant contends that the purpose for which the appellant came to Canada was to fulfil his temporary commitment to teach at the University of Alberta until June 30, 1972 and then return to England. In order to prove that the appellant had no intention, in 1970, of remaining in Canada beyond June 30, 1972, counsel for the appellant brought out evidence that the appellant had not bought a house in Canada prior to June 1972; that he had retained his bank account in the United Kingdom; and that he had not previously applied to the National Health Service for the return of his superannuation contributions until he had decided, in April 1972, to remain in Canada (Exhibits A-2 and A-3). The appellant's wife testified that, for family reasons, she would have preferred to return to the United Kingdom and that, because of his work at the University, she and the children hardly saw the appellant and she felt that the job was not worth it.
10 Counsel for the appellant concludes that, since in 1970 the purpose of the appellant in coming to Canada was to fulfil his temporary commitment and since he had no intention at that time of continuing to teach at the University beyond June 30, 1972, he qualified for the exemption provided in Article 18 of the Canada-UK Tax Agreement.
11 As to the fact that the appellant did remain in Canada and did continue to teach at the University of Alberta beyond June 30, 1972 and to the fact that he is even now so engaged, counsel for the appellant, in support of his contention that the appellant nevertheless qualifies for the said exemption referred to the decision of the Federal Court of Appeal in the case of Ernest G Stickel v Minister of National Revenue, [1973] F.C. 259, [1973] C.T.C. 202, 73 D.T.C. 5178, which was confirmed by a decision of the Supreme Court of Canada ([1974] C.T.C. 416, 74 D.T.C. 6268).
12 I think it might be useful here to point out two minor distinctions and one very important distinction to be made between the Stickel case and the one presently before the Board. First, the matter of residency which obtained in the Stickel case is not in issue in the present appeal, where the only issue is the interpretation of the wording of the Canada-UK Tax Agreement. Secondly, we are presently dealing with Article 18 of the Canada-UK Tax Agreement, whereas the Stickel case dealt with the interpretation of Article VIIIA of the Canada-US Reciprocal Tax Convention, and although the purport of these two articles is basically the same, the wording is slightly different. I do not believe that anything of substance turns on these two points. However, there is a very important difference between the Stickel case and the one now before us which, in my opinion, completely distinguishes this case from the Stickel case.
13 In the Stickel case, although the appellant remained in Canada after the expiration of the two-year probationary period of teaching at a university, he did not subsequently continue to teach at a university, but took other employment. In the present case, the appellant not only remained in Canada beyond the two-year period, but continued to teach at the University of Alberta, as he had done since his arrival in Canada.
14 In my opinion, the words of the learned Chief Justice of the Federal Court of Canada, in his reasons for judgment in the Stickel case are particularly significant and applicable to the facts of this appeal when he says at page 261 [203, 5179]:
... we are all agreed that the words “for a period not exceeding two years” are an integral part of the expression “for the purpose of teaching ... at a university ...” and do not relate to the period of the visit as revealed by the actual events.
15 Although the learned Chief Justice was interpreting the wording of Article VIIIA of the Canada-US Reciprocal Tax Convention, his interpretation of that article is wholly applicable to the comparable wording of Article 18 of the Canada-UK Tax Agreement, which reads as follows:
Article 18
A professor or teacher who visits one of the territories for a period not exceeding two years for the purpose of teaching at a university, college, school or other educational institution in that territory and who is, or was immediately before that visit, a resident of the other territory shall be exempt from tax in the first-mentioned territory on any remuneration for such teaching.
16 The appellant in this appeal is not being disqualified from benefiting from the exemptions provided for in the Tax Agreement because he has remained in Canada beyond the period of two years. He is being disqualified because he has continued to teach at a university beyond the time limit specifically set out by Article 18 of the Tax Agreement.
17 In my opinion, the intent or purpose that the appellant may have had in mind at the time of signing his teaching contract with the University is immaterial to the issue of this appeal. Regardless of what the appellant may have intended at that time, by the very wording of the Tax Agreement and by the fact that he continued to teach in Canada at a university beyond the two- year limit, he is, in my opinion, automatically disqualified from benefiting from the tax exemption provided for in Article 18 of the Canada-UK Tax Agreement.
18 For these reasons, I have no alternative but to dismiss the appeal.
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