Dean v. The Queen

Dean v. The Queen Court (s) Database Tax Court of Canada Judgments Date 2005-02-18 Neutral citation 2005 TCC 138 File numbers 2004-3004(IT)I Judges and Taxing Officers David W. Beaubier Subjects Income Tax Act Decision Content Docket: 2004-3004(IT)I BETWEEN: GEOFFREY DEAN, Appellant, and HER MAJESTY THE QUEEN, Respondent. Appeal heard on February 10, 2005 at Calgary, Alberta Before: The Honourable Justice D.W. Beaubier Appearances: For the Appellant: The Appellant himself Counsel for the Respondent: Galina M. Bining JUDGMENT 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 in accordance with the attached Reasons for Judgment. The Appellant is granted his disbursements incurred in prosecuting this appeal including those for postage, copying, phone calls and travel from Rocky Mountain House to Calgary for the hearing; they are fixed at $350. Signed at Saskatoon, Saskatchewan, this 18th day of February 2005. "D.W. Beaubier" Beaubier, J. Citation:2005TCC138 Date:20050218 Docket: 2004-3004(IT)I BETWEEN: GEOFFREY DEAN, Appellant, And HER MAJESTY THE QUEEN, Respondent. REASONS FOR JUDGMENT Beaubier, J. [1] This appeal pursuant to the Informal Procedure was heard at Calgary, Alberta, on February 10, 2005. The Appellant was the only witness. [2] Paragraphs 2 to 9 inclusive of the Reply to the Notice of Appeal set out the particulars in dispute. They read: 2. In computing his tax liability for the 2002 Taxation Year, the Appellant claimed, in the computation of non-refundable tax credits and tax payable, the amount of $28,525 as a tuition credit and the amount of $2,000 as an education credit in respect of a course taken by the Appellant at the Nelson Marlborough Institute of Technology in New Zealand (hereinafter "Nelson"). 3. The 2002 Taxation Year income tax return was initially assessed on June 5, 2003. 4. In assessing the Appellant for the 2002 Taxation Year, the Minister disallowed the tuition credit and the education credit claimed by the Appellant. The Minister considered that: (a) the Appellant was not in attendance at a university outside of Canada in a course leading to a degree and therefore not entitled to the tuition credit; and (b) the Appellant was not enrolled in a qualifying educational program as a full-time student at a designated educational institution and therefore not entitled to the education tax credit. 5. The Appellant filed a Notice of Objection to the assessment, postmarked July 17, 2003. 6. The Minister confirmed the assessment by means of a Notification of Confirmation dated April 28, 2004. 7. In so assessing the Appellant's 2002 Taxation Year and in confirming the assessment, the Minister relied on the same facts as follows: (a) the Appellant attended Nelson as a full-time student in the 2002 Taxation Year; (b) the Appellant was enrolled in a course at Nelson of greater than 13 consecutive weeks in duration; (c) the Appellant was enrolled in at Nelson to obtain his commercial helicopter license; (d) Nelson is not a university; (e) Nelson is not a degree-granting institution; and (f) the Appellant was not enrolled in a course leading to a degree issued by Nelson in the 2002 Taxation Year. B. ISSUES TO BE DECIDED 8. The issue is whether the Appellant is entitled to claim the tuition credit and education credit in the computation of his non-refundable tax credits and tax payable in the 2002 Taxation year. C. STATUTORY PROVISIONS, GROUNDS RELIED ON ANDRELIEF SOUGHT 9. He relies on sections 118.5 and 118.6 and subsection 248(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp) (the "Act") as amended for the 2002 Taxation Year. [3] Assumptions (a) to (c) in paragraph 7 are correct. However Nelson does grant a degree: Bachelor of Commerce. The courses the Appellant took in 2002 - 2003 do lead to that degree if the Appellant elects to apply them to credits for that degree, (Exhibit A-1, Programme Regulations, Para. 3.14.3). (e) and (f) are wrong because Nelson granted a degree at that time and the Appellant was enrolled in a course leading to a degree at Nelson. [4] The Appellant did not receive his Diploma in Aviation Science (Helicopter) or his Bachelor of Commerce, which his courses lead to. Rather, when he had sufficient courses and obtained his commercial helicopter pilot's licence, he quit and got a job as a helicopter pilot. [5] He got a job as a helicopter pilot at Rocky Mountain House, Alberta, at which he works 7 months each year. He works in the oil fields for the remaining 5 months per year. He is now 24 years old. [6] Paragraph 118.5(1)(b) of the Income Tax Act sets out the criteria which the Appellant must satisfy to succeed in part. It reads: 118.5(1) Tuition Credit - For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted, ... (b) [university outside Canada] - where the individual was during the year a student in full-time attendance at a university outside Canada in a course leading to a degree, an amount equal to the product obtained when the appropriate percentage for the year is multiplied by the amount of any fees for the individual's tuition paid in respect of the year to the university, except any such fees (i) paid in respect of a course of less than 13 consecutive weeks duration, (ii) paid on the individual's behalf by the individual's employer to the extent that the amount of the fees is not included in computing the individual's income, or (iii) paid on the individual's behalf by the employer of the individual's parent, to the extent that the amount of the fees is not included in computing the income of the parent by reason of subparagraph 6(1)(b)(ix); and ... [7] Thus, the remaining question which the Appellant must satisfy to succeed is whether Nelson was a university. [8] Mogan, J. dealt with this problem in Gilbert v. R, 1998 T.C.J. No. 1091 and [1999] 2 C.T.C. 2127. At paragraph 14 he stated: The word "university" is not defined in the Act, but the Respondent has provided me with three dictionary definitions of the word, all of which have as a condition the granting of a degree. The Dictionary of Canadian Law defines university as follows: The chief distinguishing characteristic between a university and other institutions of learning is the power and authority possessed by an institution of learning to grant titles or degrees. In Webster's Third New International Dictionary (an American publication), the word "university" is defined as: A body of persons gathered at a particular place for the disseminating and assimilating of knowledge in advanced fields of study; an institution of higher learning providing facilities for teaching and research and authorized to grant academic degrees. And lastly, in Black's Law Dictionary, it is described as: An institution of higher learning, consisting of an assemblage of colleges united under one corporate organization and government, affording instruction in the arts and sciences and the learned professions, and conferring degrees. [9] The Respondent filed an affidavit by one of its officer's indicating that various publications do not list Nelson as a designated educational institution for the purpose of Section 118.6. However Nelson's own literature filed by the Appellant in Exhibit A-1 states that it grants the Bachelor of Commerce degree and that the Appellant's courses are creditable towards the Bachelor of Commerce. The Court accepts that literature supported by the Appellant's testimony as evidence of the truth that at the time in question the Appellant was in full-time attendance at a university outside Canada in a course leading to a degree. [10] On the basis of the affidavit filed by the Respondent, the Appellant's claim under Section 118.6 is denied because Nelson was not a designated educational institution pursuant to the Income Tax Act during the period in question. [11] However, it was a university and the Appellant's claim under 118.5(1)(b) is allowed and this matter is referred back to the Minister of National Revenue for reconsideration and reassessment accordingly. The Appellant is granted his disbursements incurred in prosecuting this appeal including those for postage, copying, phone calls and travel from Rocky Mountain House to Calgary for the hearing; they are fixed at $350. Signed at Saskatoon, Saskatchewan this 18th day of February 2005. "D.W. Beaubier" Beaubier, J. CITATION: 2005TCC138 COURT FILE NO.: 2004-3004(IT)I STYLE OF CAUSE: Geoffrey Dean v. The Queen PLACE OF HEARING: Calgary, Alberta DATE OF HEARING: February 10, 2005 REASONS FOR JUDGMENT BY: The Honourable Justice Beaubier DATE OF JUDGMENT: February 18, 2005 APPEARANCES: For the Appellant: The Appellant himself Counsel for the Respondent: Galina M. Bining COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Canada