Whitfield v. The Queen

Whitfield v. The Queen Court (s) Database Tax Court of Canada Judgments Date 2004-09-16 Neutral citation 2004 TCC 606 File numbers 2004-824(IT)I Judges and Taxing Officers Donald G.H. Bowman Subjects Income Tax Act Decision Content Docket: 2004-824(IT)I BETWEEN: CINDY WHITFIELD, Appellant, and HER MAJESTY THE QUEEN, Respondent. ____________________________________________________________________ Appeal heard on August 30, 2004, at Toronto, Ontario. Before: The Honourable D.G.H. Bowman, Associate Chief Justice Appearances: For the Appellant: The Appellant herself Counsel for the Respondent: Jenna Clark ____________________________________________________________________ JUDGMENT It is ordered that the appeal from the assessment made under the Income Tax Act for the 2002 taxation year is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment to allow the cost of installing the hot tub. Signed at Ottawa, Canada, this 16th day of September 2004. "D.G.H. Bowman" Bowman, A.C.J. Citation: 2004TCC606 Date: 20040916 Docket: 2004-824(IT)I BETWEEN: CINDY WHITFIELD, Appellant, and HER MAJESTY THE QUEEN, Respondent. REASONS FOR JUDGMENT Bowman, A.C.J. [1] This appeal is from an assessment for the 2002 taxation year. The issue is whether the cost of an elliptical trainer and a hot tub are allowable medical expenses for the purposes of computing the appellant's non-refundable medical expense credit under section 118.2 of the Income Tax Act. The amount spent on these two items is not disputed. [2] The appellant's husband, Daniel, has suffered from clinical depression, bi-polar disorder, obesity and chronic pain in his right hip for a number of years. Since 1995 he has been receiving long-term disability payments. [3] In 2002 he had his right hip replaced. He suffers from lower back pain and spinal problems. He has been treated by a number of specialists, both with respect to his hip and back problems and with respect to his psychiatric problems. Whether his physical and his psychiatric problems are connected is something that I need not decide. Indeed, I am not in a position to do so. It is sufficient to say that the appellant's husband has serious medical problems. A number of medical reports were put in evidence. [4] The elliptical trainer was purchased because Daniel Whitfield's orthopedic surgeon recommended "no impact" exercise. The elliptical trainer achieves this purpose because its use does not involve having his feet touch the ground, as would be the case with walking, jogging or a treadmill. The elliptical trainer apparently bears some resemblance to a stationary bicycle except that the front wheel is elliptical and power is provided both by pedals and by the moveable handlebars. [5] Mr. Whitfield spends about five hours per week on the trainer. The hot tub was purchased because Mr. Whitfield's psychiatrist also recommended hydrotherapy not only because it provides deep relaxation for depression and anxiety, but also helps to relieve joint pain. [6] The medical expense credit is given under subsection 118.2(1) for a large number of expenses related to medical matters. Subsection 118.2(2) reads in part: (2) - For the purposes of subsection (1), a medical expense of an individual is an amount paid . . . . . (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 may be prescribed as to its use or the reason for its acquisition, to the extent that the amount so paid does not exceed the amount, if any, prescribed in respect of the device or equipment; Section 5700 of the Income Tax Regulations reads in part 5700. For the purposes of paragraph 118.2(2)(m) of the Act, a device or equipment is prescribed if it is a . . . . . (i) device that is designed to assist an individual in walking where the individual has a mobility impairment; The French version of paragraph (i) reads i) tout dispositif qui est conçu à l'intention du particulier à mobilité réduite pour l'aider à marcher; [7] In paragraph (m) of subsection 118.2(2) the word "prescribed" is obviously used in two senses - one in a legislative sense and one in a medical sense. Subparagraphs (i) - (iv) of paragraph (m) in French make the distinction clear, if it were not already clear. m) pour tout dispositif ou équipement destiné à être utilisé par le particulier, par son conjoint ou par une personne à charge visée à l'alinéa a) et qui répond aux conditions suivantes, dans la mesure où le montant payé ne dépasse pas le montant fixé par règlement, le cas échéant, relativement au dispositif ou à l'équipement : (i) il est d'un genre visé par règlement, (ii) il est utilisé sur ordonnance d'un médecin, (iii) il n'est pas visé à un autre alinéa du présent paragraphe, (iv) il répond aux conditions prescrites quant à son utilisation ou à la raison de son acquisition; There are two problems here (a) Were the elliptical trainer and the hot tub "prescribed" by a doctor? (b) Were they devices designed to assist an individual in walking? [8] Where a physician "prescribes" something it need not be in writing. A doctor may write the name of a prescription drug on a piece of paper before a pharmacist will fill the prescription but that is certainly not true of a medical practitioner's advice that a particular device or a non-prescription drug be acquired and used by a patient. I should not have thought that it was this Court's role to read into a statute words that will limit the plain meaning of the statutory language. [9] Nonetheless, we have a decision of the Federal Court of Appeal in The Queen v. Ray, 2004 DTC 6028, which appears to stand for the proposition that the words of section 118.2 are to be given the narrowest possible construction against the taxpayer. In Herzig v. The Queen, 2004 T.C.C. 344, I referred to the Ray decision as follows: [7] This is a most deserving case. Mr. Herzig testified that the oncologist gave his wife six months to live. With the use of the homeopathic medicines and supplements his wife succeeded in prolonging her life by about four years. [8] We have, unfortunately, the decision of the Federal Court of Appeal which requires that a narrow interpretation be placed on paragraph 118.2(2)(n). In The Queen v. Ray, 2004 DTC 6028, the Federal Court of Appeal stated at page 6031: In my view, it is reasonable to infer that the recording requirement in paragraph 118.2(2)(n) is intended to ensure that tax relief is not available for the cost of medications purchased off the shelf. There are laws throughout Canada that govern the practice of pharmacy. Although the laws are not identical for each province and territory, they have common features. Generally, they prohibit a pharmacist from dispensing certain medications without a medical prescription, and they describe the records that a pharmacist is required to keep for medications dispensed by prescription, including information that identifies the prescribing person and the patient. There is no evidence that pharmacists anywhere in Canada are required to keep such records for the substances in issue in this case. I cannot accept the suggestion that, in the case of a medication that is prescribed by a physician but is purchased at a pharmacy off the shelf, a sales slip or invoice from the pharmacist would be a sufficient "recording" to meet the statutory requirement. A record in that form cannot meet the apparent function of the recording requirement. There must be a record kept by the pharmacist in his or her capacity as pharmacist. That necessarily excludes substances, however useful or beneficial, that are purchased off the shelf. [9] In other words only prescription medicines would qualify. [10] I would do the appellant no favour if I were to adopt a more compassionate approach, as has been done in other cases in the court, to read "as recorded by a pharmacist" as encompassing medications prescribed by a medical doctor that are sold in pharmacies but recorded simply as a sale by the pharmacist but not as a prescription drug. Such a decision would simply be reversed by the Federal Court of Appeal. [10] The approach enunciated in Ray may usefully be contrasted with that stated in Friis v. The Queen, 98 DTC 6419, and Johnston v. The Queen, 98 DTC 6169. In Friis, Linden J.A. speaking for the majority, stated: [1] In my view, this section 28 application should be allowed in the light of this Court's decision in Johnston v. Canada, [1998] F.C.J. No. 169 which was released following the Tax Court Judge's decision in this case. In that case, Justice Létourneau, quoting Judge Bowman in another case (Radage v. R., [1996] 3 C.T.C. 2510), indicated that these "provisions must be given a humane and compassionate construction" and should not be interpreted "so restrictively as to negate or comprise the legislative intent", which is to "provide modest relief to persons who fall within a relatively restricted category of markedly physically or mentally impaired persons. The intent is neither to give the credit to every one who suffers from a disability nor to erect a hurdle that is impossible for virtually every disabled person to surmount. It obviously recognizes that disabled persons need such tax relief and it is intended to be of benefit to such persons." Notwithstanding the Ray decision I do not think I would be justified in reading into paragraph (m) the words "in writing". [11] I have however somewhat greater difficulty in finding that the doctors prescribed the elliptical trainer or the hot tub. What they prescribed was "non-impact" exercise and hydrotherapy. The evidence does not go so far as to establish that they ever mentioned the specific device although one might reasonably infer that they were prescribing any type of device that provided the type of activity which the doctors considered beneficial. There are, after all, not that many. So far as hydrotherapy is concerned, where better to obtain it than in a hot tub? On the other hand, an elliptical trainer is only one of many devices that might be used for non-impact exercise. [12] I think therefore that the hot tub was prescribed by a medical practitioner within the meaning of subparagraph 118.2(2)(m)(ii), but it would be stretching a point to say the elliptical trainer was. [13] On the question whether they are "of a prescribed kind" within subparagraph (i) there is considerably more doubt, and the decisions in this Court appear, on their face at least, to be somewhat inconsistent. The differences are illustrated in the judgment of Justice Bell in Klywak v. The Queen, 2004 T.C.C. 523, where he said: [6] The Appellant stated that if she did not have the hot tub she would be loaded with medication and could not function properly. She referred to the letters from her doctor. She also referred to Johnson v. Her Majesty the Queen, [2003] T.C.J. No. 41, in which Little, J. of this Court allowed as a medical expense the cost of a hot tub purchased on the recommendation of the Appellant's doctor. The learned Judge said: I accept the Appellant's credible and uncontradicted evidence that she purchased the hot tub only for the purpose of hydrotherapy and relief of pain. [7] She also referred to James Donaghue v. Canada, [2003] T.C.J. No. 721, in which O'Connor, J. considered the hot tub a prescribed device since he believed that it qualified under subparagraph (i) of Regulation 5700 as a device that is designed to assist an individual in walking where the individual has a mobility impairment. He stated further that it may qualify under subparagraph 118.2(2)(m) of the Act since it is of a prescribed kind and since it was purchased on the advice of a medical practitioner. He stated that there was no indication that the prescribing must be in writing and that the hot tub greatly alleviated the Appellant's problem, thus enabling him to be mobile both within and outside his home. . . . . . [10] Respondent's counsel referred to Gibson v. Canada, [2000] T.C.J. No. 753, affirmed by the Federal Court of Appeal, [2001] F.C.J. No. 1758. In this court Mogan, J. described the Appellant as having developed fibromyalgia in and around her neck, causing severe pain in the muscles around the neck and in her right arm. After a description of therapy he wrote that the Appellant found relief from being in a tub with jets of hot water focused on her neck and arms. She, therefore, had a whirlpool spa installed in her home. She found that the hot tub reduced her pain and allowed her more mobility. The judgment referred to Vantyghem v. The Queen, [1999] 2 C.T.C. 2159 in which Rip, J. of this Court determined that the "renovation" of a bathroom may include the installation of items that were not found in the bathroom when originally built, such renovations being the cost of installing a hot tub. Judge Mogan also referred to Clark v. The Queen, [1994] 4 C.T.C. 2005 in which Rowe, J. of this Court dismissed the appeal of a wife who attempted to deduct as a medical expense the cost of purchasing and installing a hot tub which was prescribed by her husband's arthritis specialist. He further referred to Ollman v. The Queen, [2000] 1 C.T.C. 2789 in which a woman purchased a hot tub on the recommendation of her orthopaedic surgeon and physiotherapist to get relief from chronic lower back pain following a car accident and serious injuries. O'Connor, J. held that the cost of the hot tub did not qualify as a medical expense. He referred also to Gordon v. The Queen, [2000] 2 C.T.C. 2399 in which Gordon's wife was recovering from a car accident which left her with severe rheumatologic disorders including fibromyalgia and inflammatory osteo-arthritis. Because she required frequent hot baths it was recommended that she have one installed in her home. Beaubier, J. concluded that the hot tub was not a device or equipment within the meaning of paragraph 118.2(2)(m) but he allowed the installation cost as a reasonable expense relating to a renovation or alteration of the Gordon family dwelling. Mogan, J. concluded that having regard to paragraph 118.2(2)(m) of the Act and the items listed in Regulation 5700 he was satisfied that the hot tub did not qualify as a "device or equipment" and allowed only the cost of installing same. [14] In addition to the cases referred to by Bell J., we have Hope v. Canada, 2003 T.C.C. 493, in which Little J. held that the cost of a hot tub was not an allowable medical expense for the purpose of section 118.2. In Hope, Little J. did not refer to his decision in Johnson in which he allowed the cost of a hot tub. Similarly, O'Connor J. in Donaghue v. Canada, [2003] T.C.J. No. 721 (Q.L.), allowed the cost of a hot tub as a medical expense. He did not refer to his earlier decision in Ollman v. The Queen, [2000] 1 C.T.C. 2789, in which he held that the cost of a hot tub was not an allowable medical expense. [15] In Gibson v. Canada, [2000] T.C.J. No. 753 (Q.L.), Mogan J. held that the cost of a hot tub was not an allowable medical expense but the cost of installing it was. His judgment was affirmed by the Federal Court of Appeal. Rothstein J. stated that "The cost of the spa itself did not qualify for any medical expense credit". [16] The statement was of course obiter. The question of the cost of the spa was not before the Federal Court of Appeal. All that was before that court was the cost of installation. Therefore, the observation by Rothstein J. cannot be regarded as authority. [17] One could say that the cases are irreconcilable or one could say that they each turn on their own facts - sometimes a hot tub is designed to assist an individual in walking and sometimes it is not. If I can find a consistent thread in all of these cases - and perhaps I am being overly optimistic - it is this: if on the evidence the judge finds that a significant purpose and use of the hot tub is to assist in the mobility of the individual the courts seem inclined to allow the expense. I would also observe that in the majority of the cases this court has held that the cost of a hot tub does not qualify. This is certainly the case in Klywak where Bell J. made a specific finding of fact that the purpose and effect of the hot tub assisted the appellant in walking. [18] I do not think that the evidence in this case supports the conclusion that either the hot tub or the elliptical trainer were designed to assist the individual in walking. They may have helped to alleviate the hip and back pain and the hot tub certainly alleviates the depression. [19] On the basis of the Gibson case it seems clear that that cost of installing the hot tub is allowable not under paragraph 118.2(2)(m) but under paragraph (l.2). [20] The appeal is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment to allow the cost of installing the hot tub. Signed at Ottawa, Canada, this 16th day of September 2004. "D.G.H. Bowman" Bowman, A.C.J. CITATION: 2004TCC606 COURT FILE NO.: 2004-824(IT)I STYLE OF CAUSE: Cindy Whitfield and Her Majesty The Queen PLACE OF HEARING: Toronto, Ontario DATE OF HEARING: August 30, 2004 REASONS FOR JUDGMENT BY: The Honourable D.G.H. Bowman, Associate Chief Justice DATE OF JUDGMENT AND REASONS FOR JUDGMENT: September 16, 2004 APPEARANCES: For the Appellant: The Appellant herself Counsel for the Respondent: Jenna Clark COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada