Côté v. R., [1997] 3 C.T.C. 2607

Léger D.J.T.C.:

1 This appeal was heard at Edmundston, New Brunswick on July 19, 1996. This is an appeal from a notice of reassessment relating to the 1993 taxation year made by the Minister of National Revenue (the “Minister”) on December 15, 1994 and disallowing the appellant's deduction of medical expenses in the amount of $4,530.32. The Court asked for written comments from the parties to be submitted by October 1, 1996.

2 The appellant suffers from rheumatoid spondylitis and his aortic valve does not function properly. He wears a pacemaker because his conduction system does not function properly.

3 By notice of reassessment for the 1993 taxation year, the Minister disallowed the following amounts:

[TRANSLATION]

(a)	drugs, pharmaceutical products and other preparations:			$62.87
(b)	transportation expenses:
(i)	10-12-93	Dr. J. Henderson (Fredericton)	$146.20
(ii)	18-03-93	Dr. Kennedy (Perth)	$43.92
(iii)	07-06-93	Dr. Kennedy (Perth)	$43.92
(iv)	13-07-93	Dr. Kennedy (Perth)	$43.92
(v)	08-09-93	Dr. Kennedy (Perth)	$43.92
(vi)	01-12-93	Dr. Kennedy (Perth)	$43.92
(vii)	28-12-93	Dr. Kennedy (Perth)	$43.92
(viii)	21-06-93	Dr. Buick (Perth)	$43.92
(ix)	12-11-93	Emergency (Perth)	$43.92
(x)	16-09-93	Dr. W.R. Henderson (Perth)	$43.92
(xi)	14-07-93	Blood test (Perth)	$43.92
(xii)	18-03-93	Blood test (Perth)	$43.92
(xiii)	25-03-93	Echocardiogram (Edmundston)	$36.60
(xiv)	08-04-93	X-Ray (Edmundston)	$36.60
(xv)	16-08-93	Test (Edmundston)	$36.60
(xvi)	09-09-93	Dr. St-Onge (Edmundston)	$36.60
(xvii)	02-09-93	Dr. St-Onge (Edmundston)	$36.60
(xviii)	17-09-93	Dr. St-Onge (Edmundston)	$36.60
				$849.12
(c)	security system and accessories:	$1,049.20
(d)	exercise table:	$1,000.00
(e)	water softener and costs associated with the energy used in operating a whirlpool bath:	$944.13
(f)	cleaning system:	$625.00
Total			$4,530.32

4 In paragraph 7 of the Reply to the Notice of Appeal, the respondent conceded that the appellant was allowed to deduct transportation expenses of $366.00 related to his trips to Edmundston and Fredericton (the amounts indicated in subparagraphs (b)(i), (xiv), (xv), (xvi), (xvii) and (xviii) above).

5 At the hearing, the respondent consented to judgment with respect to the following amounts:

(a)	drugs, pharmaceutical products and other preparations:		$62.87
(b)	transportation expenses:
	(viii) 21-06-93	Dr. Buick (Perth)	$32.16
	(x) 16-09-93	Dr. W.R. Henderson (Perth)	$32.16
(c)	exercise table:	$1,000.00
Total		$1,127.19

6 It should be noted that the appellant admitted that he could deduct only $32.16 per trip to Perth and that the amount of $43.92 indicated in Exhibit A-1 was an error.

7 Accordingly, the amounts which remain at issue before the Court are as follows:

(a)	transportation expenses to Perth (9 trips at $32.16 per trip)	$289.44
(b)	security system and accessories	$1,049.20
(c)	water softener and costs associated with the energy needed to operate a whirlpool bath	$944.13
(d)	cleaning system	$625.00
Total		$2,907.77

8 The question at issue is whether in computing his medical expense tax credit and his non-refundable tax credits for the 1993 taxation year, the appellant may deduct as medical expenses under subsection 118.2(2) of the Income Tax Act an amount greater than $4,061.99, which includes the $2,568.80 allowed by the Minister in the reassessment, the $366.00 allowed by the Minister in the Reply to the Notice of Appeal and the $1,127.19 allowed by the respondent at the hearing.

9 Subsections 118.2(2) and (4) of the Income Tax Act read as follows:

(2) Medical expenses. For the purposes of subsection (1), a medical expense of an individual is an amount paid

• (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, incapable 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 or herself, and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services;

• (l.2) for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks normal physical development or has a severe and prolonged mobility impairment, to enable the patient to gain access to, or to be mobile or functional within, the dwelling;

• (m) for any device or equipment for use by the patient that

  • (i) is of a prescribed kind,

  • (ii) is prescribed by a medical practitioner,

  • (iii) is not described in any other paragraph of this subsection, and

  • (iv) meets such conditions as are prescribed as to its use or the reason for its acquisition;

(4) Deemed payment of medical expenses. Where, in circumstances in which a person engaged in the business of providing transportation services is not readily available, an individual makes use of a vehicle for the purpose described in paragraph 2(g), the individual or the individual's legal representative shall be deemed to have paid to a person engaged in the business of providing transportation services, in respect of the operation of the vehicle, such amount as is reasonable in the circumstances.

• (a) the locality where the medical services are provided is not less than 40 kilometres from the locality where the appellant dwells;

• (b) it is impossible to obtain substantially equivalent medical services in the locality in which the appellant dwells;

• (c) the route travelled is, having regard to the circumstances, a reasonably direct route;

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

• (e) the amount is reasonable in the circumstances for the operation of the vehicle.

11 The respondent admitted that Perth, the locality in which the medical services were provided, is located more than 40 kilometres from Grand falls, the locality in which the appellant dwells. Moreover, he did not question that the route taken by the appellant was reasonably direct, that the appellant went to Perth to obtain medical services and that the deduction of $32.16 per trip is reasonable.

12 However, the respondent argued that the appellant could have obtained substantially equivalent medical services in Grand-Sault, that is was not reasonable, having regard to the circumstances, for the appellant to have gone to Perth to obtain these services and that travelling to Perth to obtain the services from Dr. Kennedy was a personal choice and not a necessity.

13 The appellant testified that he had been treated by Dr. Nolan of Grand-Sault for a number of years. At some point, he felt it advisable to obtain a second opinion. He consulted a physician in Perth. In Dr. Nolan's view this was an unforgivable sin. The appellant had questioned the divinity of his physician. The doctor refused to continue treating the appellant. The appellant testified that he tried to find another physician in the Grand-Sault area but was told that all of them were fully booked and were not accepting new patients. In the meantime, the appellant was able to receive treatment in Perth from Dr. Carter Kennedy. The fact that all of the Grand-Sault physicians were fully booked was confirmed by Dr. Jacques Corbin who also testified at the appeal hearing. After considering the evidence, I conclude and declare that substantially equivalent medical services were not available in Grand-Sault for the appellant and, having regard to the circumstances, it was reasonable and necessary for the appellant to travel to Perth to obtain medical services.

14 The respondent also contests two trips to Perth for blood tests. It is a well-known fact that a physician must be on staff at a hospital at which he has medical privileges. It is doubtful whether a physician can order blood tests and have the analysis done in a hospital in which he does not have privileges. In the absence of evidence to the contrary, I conclude and declare that the blood tests that he ordered to have done at the Perth hospital were fair and reasonable and that the transportation expenses are justified and authorized for the purposes of paragraph 118.2(2)(g) and subsection 118.2(4) of the Income Tax Act. Accordingly, the amounts indicated in subparagraphs (b)(ii), (iii), (iv), (v), (vi), (vii), (ix), (xi) and (xii) above can be deducted as medical expenses. The corrected amounts total $289.44.

15 Dr. Jacques Corbin testified as follows:

[TRANSLATION]

As a physician of internal medicine, I am somewhat of a “jack of all trades”, I do cardiology, rheumatology, but more at the second-line level.

I think it is important to describe the Mr. Côté's medical condition. I think this is important. You can see how he looks. He has an illness called rheumatoid spondylitis; it is also called Marie-Strumpell, that is what you see in the books.

It is an arthritis of unknown etiology, we do not know where it comes from. It affects primarily the axial column, that is the spinal column. It affects the joints such as the hips and the shoulders. This is why Mr. Côté has had hip replacements, three on the left side and two on the right or vice versa, I don't remember which any more.

He has also had complications which are attributable to this illness. For example, in 1978 he had a perforated bowel caused by diverticulitis. An inflamed colon is another disorder of people who suffer from rheumatoid spondylitis.

So it is not a disease which affects only the joints. It is more of a systemic disease which affects all of the body's systems. Mr. Côté has been suffering from this disease since before he was 20 years of age, not just two years, he has suffered from it for years.

This illness also affects the heart to the extent that it can affect the heart's conduction system. That is why we had to implant a pacemaker because his conduction system was not functioning well and he had heart depressions accompanied with excessive weakness. This is why all of this is part of the rheumatoid spondylitis disease.

He also has a disorder with his aortic valve, an inadequacy of his aortic valve, which is monitored by ultrasound. That is why he has ultrasound - we run echocardiograms to check his aortic valve.

In other words, the main result of rheumatoid spondylitis is a fusion. All of the vertebrae. Normally, the vertebrae move. You can bend over and touch you fingers to the ground, you can move your column, you can turn, but he can't do any of those things.

His column is fused so that he cannot bend over and his fingers cannot get within a foot of the ground, he cannot bend any farther than that. He cannot raise his arms any higher than this because of his shoulders. He has trouble turning his head.

It is almost a miracle that he has managed to remain as independent and as mobile as he has. He has been able to do so by following his doctors' instructions.

What is the treatment for rheumatoid spondylitis? There isn't any. There is no cure for it. The treatment and I can give you the reference in the bible of internal medicine, which is Harrison. The first line of treatment is exercise and rigorous movement of the joints each day. That is the only way that these individuals can remain independent and mobile.

Everything that Mr. Côté has claimed to date are tools which will enable him to remain mobile and retain the greatest range of movement. There is nothing better than hot water and a bath in which to do amplitude movements and strengthening. The exercise table has been conceded, but it is absolutely necessary for him.

Do you have any questions which you would like to ask, Fernand?

YOUR HONOUR: Do you want to ask him any questions, Mr. Côté?

APPELLANT: Well, I think you have covered everything ... with everything that has happened this afternoon, I am trying ... I will try to be able ...

YOUR HONOUR: Q. There are two or three things. You mentioned the bath. Did you yourself order the patient to get a bath or did you recommend it or what?

A. I think that it is necessary, if you are talking about an order on prescription paper with my letterhead, an order like that, the answer is no.

But the discussion that I had with Mr. Côté during an appointment, we were talking about exercising and a whirlpool bath and all that and I said that he should purchase a whirlpool bath. Afterwards, the patient says, listen, in order to get my tax deduction, I need a certificate.

Well, then we write a letter and we say, well, it is true. That is what Dr. Henderson did and he spoke to me about it as well. But if you are asking whether I wrote a prescription on a little piece of paper like that, well then, no, I did not do that.

Q. It would not be normal for you to do so?

A. Well, from now on, after what is happening, I will be doing it each time. If that is what it takes.

Q. In the large book that was ordered by the officials which tells ... it says that as long as there is a prescription, it is deductible. Do you see?

A. From a medical standpoint, all I can tell you is that it is essential, he needs it. It is not a luxury.

Q. If he had asked for a prescription and it had been explained to you that the Income Tax Act requires a prescription, would you, with your knowledge of the case, would you have prescribed a whirlpool bath?

A. Absolutely.

Q. That is the first issue. The second issue concerns the area of security, could you explain?

A. As for the security area, it happens quite regularly that we recommend to our patients, I am speaking of my patients who have cardiac problems, patients who have difficulty getting around, to install security systems in the home. Because it is a matter of safety, particularly for patients who live alone.

Q. Alone?

A. Okay? At present, there are several systems. But the best one is the one that is connected to a 24-hour monitoring centre. Often, when patients become ill, they cannot get to a telephone, they cannot call. By pressing a button, it automatically alerts the centre that there is a problem. The centre calls and if there is no answer, they send help, all in a matter of a few minutes. I often advise patients to get such a system.

But again, I do not remember actually writing it down. That is, I prescribe a security system to you and all that. We advise our patients to get that type of system.

Because of his medical condition, Mr. Côté needs such a system to live alone at his home. Otherwise, he would need someone with him around the clock. He lives alone. To live alone, he needs a security system.

16 I was very impressed by Dr. Corbin's testimony. His evidence was fair, lucid and full of medical knowledge. I accept this evidence without reservation. I conclude and declare that the security system and accessories were prescribed and are necessary and authorized under subparagraph 118.2(2)(l.2) because the appellant lacks normal physical developmental or has a severe and prolonged mobility impairment. The cost of this system is $1,049.20. I conclude and decide that there is sufficient evidence to establish the need for the appellant to have access to a whirlpool bath. I accept his evidence according to which a water softener is needed for the whirlpool bath, along with the energy to heat the water and operate the bath. It would not be logical for the appellant to have access to such a bath and then be required to exercise in cold water. The appellant submitted a letter (Exhibit A-6) dated September 21, 1994 from Camil Ouellette, an energy consultant, which gave an estimate of the energy costs associated with the use of the whirlpool bath. This evidence was contested by the respondent as being inadequate and not in compliance with the Evidence Act. This appeal was heard under the informal procedure under which the rules of evidence are often not complied with. Given the circumstances and the expense which the appellant would have been required to incur to provide appropriate evidence under the rules of evidence, I believe that the Court should show restraint and allow this evidence.

17 Section 12 of the Interpretation Act reads as follows:

Every enactment is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.

18 The purpose of the provisions of the Income Tax Act which provide for the deduction of medical expenses is to avoid taxing that part of the citizen's income which is required for the necessities of life. While there are provisions specifying what medical expenses are, the Court is required to give the most equitable and large interpretation possible to this legislation that is compatible with the attainment of its object.

19 After considering all of the evidence and despite the fact that there was no doctor's prescription for the water softener or for the costs associated with the energy needed to operate the whirlpool bath, the Court concludes and declares that it must authorize the deduction of these expenses in applying the interpretation rule cited above.

20 Now, to summarize, the appellant is authorized to deduct from his income as medical expenses, the following expenses:

21 There is not sufficient evidence with respect to the deduction of $625 for a cleaning system. Therefore, this deduction is not authorized.

22 Accordingly, the appeal is allowed and this file is referred back to the Minister of National Revenue for reassessment for the 1993 taxation year on the basis of the consents given by the respondent during the hearing and of the instructions of this Court with respect to the deduction of the above-mentioned medical expenses.