Seely v. The Queen

Seely v. The Queen Court (s) Database Tax Court of Canada Judgments Date 2003-06-17 Neutral citation 2003 TCC 342 File numbers 2001-1335(IT)I Judges and Taxing Officers Cameron Hugh McArthur Subjects Income Tax Act Decision Content Citation: 2003TCC342 Date: 20030617 Docket: 2001-1335(IT)I BETWEEN: JUDY K. SEELY, Appellant, and HER MAJESTY THE QUEEN, Respondent. ____________________________________________________________________ Counsel for the Appellant: Richard Speight Counsel for the Respondent: Christa MacKinnon ____________________________________________________________________ REASONS FOR JUDGMENT (Delivered orally from the Bench at Fredericton, New Brunswick on May 17, 2002) McArthur J. [1] The issue in this appeal is whether the Appellant is entitled to a medical expense credit for the cost of hardwood flooring under section 118.2 of the Income Tax Act for the 1999 taxation year. The cost of the flooring was approximately $11,000. This included a moulding and a barrier to retain the moulding. The tax refund claimed was approximately $3,000. [2] Mrs. Seely states that the medical expenses were incurred with respect to her husband, Jim. Subsection 118.2(1) permits a credit for a percentage of the taxpayer's medical expenses and paragraph 118.2(2)(l.1) defines medical expenses as follows: 118.2(2) ... an amount paid (l.1) for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks a 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; [3] The relevant facts as I find them and taken in large part from the comprehensive Notice of Appeal completed by Mrs. Seely on behalf of her husband are: Jim has been a patient of a number of physicians including specialists in environmental illness. He has suffered from allergies due to lack of normal physical development (as supported by his doctor). We were advised by doctors that the removal of old carpeting and sources of mould would improve his health. Before we undertook these extensive home renovations, my husband suffered from chronic diarrhea daily for more than one year, (food allergies), sinus headaches, again due to allergies. and in January 1999 he had an irreversible ear damage due to ear infection, and a burst eardrum which can also be attributed to allergies. He is now partially deaf in one ear. Some of his symptoms were/are: 1. A reaction to many food and drinks - chronic diarrhea, heartburn ... 2. Ear infection ... 3. Severe headaches and sinus problems ... 4 Severe headaches and sinus problems due to dust, mould and pollens ... [4] The Appellant refers to a major incident during Christmas 1998 where her husband had severe headaches and suffered severe discomfort. And in 1999, his eardrum burst. He has seen many specialists. He has been working for and continues to work for New Brunswick Power since 1973. The report also contains a comprehensive medical history which, for the purposes of brevity, I will not recite at this time. [5] The Appellant was the only witness and her credibility is not questioned and she was ably represented by legal counsel. She indicated that Jim was referred by his general practitioner to an allergy specialist. Both doctors advised him to remove the old carpeting at home. Letters to this effect were put in evidence. The first from his general practitioner, Dr. Anna Marie MacKinnon, dated February 14, 2001 reads: Because of significant health impairment secondary to his immune dysfunction aggravated by presence of chemicals and moulds in his home, James Seely was unable to be functional in his own home until the carpets were removed and replaced with hardwood. He has been advised by Dr. Imbulgoda, an allergy specialist, and myself that he should replace his carpets as a health measure. And a shorter letter from Dr. Manel Imbulgoda reads: Mr. Seely has house dust allergies. He stated his symptoms were worse due to the carpeting in his home. He was advised to remove the carpeting which he did and subsequently installed hardwood flooring. As a result of this change, his symptoms have improved. The Appellant added: Since we've made our home renovations, my husband has been able to achieve a normal lifestyle. The renovations have enabled him to function within the home where previously before the renovations he was not. Although his ear damage is irreversible, a portion of his allergy symptoms have been alleviated. The renovations were made solely on the advice of a medical practitioner and we were aiming solely at improving the ability of my husband to be able to function normally within the dwelling. [6] From the lengthy medical history of Mr. Seely's health, there is no doubt that he lacked normal physical development within the meaning of the Act. The Appellant acknowledges that Mr. Seely suffered from allergies and he was advised by his doctors that the removal of his carpeting and sources of mould would improve his health. [7] The quantum of expense is not an issue. The Minister's position includes: The cost of acquisition and installation of hardwood flooring was not an expense relating to a renovation or alteration to a dwelling for a patient who lacks physical development or has a severe and prolonged mobility impairment. Upon reading the letters of Drs. MacKinnon and Imbulgoda and hearing the Appellant's extensive evidence, there was no doubt that Mr. Seely had a severe and prolonged impairment. The expense for the hardwood floors and the work done to remove the mould was reasonable. His impairment was a mobility one in that the carpeting and mould prevented him from functioning within his dwelling. Dr. MacKinnon further stated: James Seely was unable to be functional in his home until the carpets were removed and replaced with hardwood. [8] The Respondent presented no evidence other than able cross-examination. [9] I agree with the Appellant's counsel as stated in paragraph 29 at page 14 of his written argument. The Minister's counsel presented no case law but attempted to distinguish the present facts from cases submitted on the Appellant's behalf, on the basis that Mr. Seely's impairment was not as severe as that suffered by the taxpayers in those cases. In particular, there were some four cases of a list of eleven that were given most of the attention, McGaugh, [1999] T.C.J. No. 954, Williams, [1997] T.C.J. No. 1346, Pawlychka, [1999] T.C.J. No. 886, and Russell, [2001] T.C.J. No. 442. [10] There was no comparative evidence with respect to the degree of mobility impairment. I am satisfied that the Appellant has met the criteria in section 118.2. The following statements of Judge Bell in Pawlychka, apply equally to Mrs. Seely's appeal: 10 Section 118.2 is intended to provide tax relief for individuals with certain conditions. As stated above, although paragraph (l.2) appears to refer to a certain and obvious type of mobility impairment, I do not think it can be interpreted only in such narrow fashion. In Johnston v. Her Majesty the Queen, 98 DTC 6169, Letourneau, J.A. stated at page 6171, after referring to the words of Bowman, T.C.J. in Radage v. R., [1996] 3 C.T.C. 2510: Indeed, although the scope of these provisions is limited in their application to severely impaired persons, they must not be interpreted so restrictively as to negate or compromise the legislative intent. 11 The words of Bowman, T.C.J. to which he referred are: The legislative intent appears to be to provide a 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 everyone 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. ... If the object of Parliament, which is to give to disabled persons a measure of relief that will to some degree alleviate the increased difficulties under which their impairment forces them to live, is to be achieved, the provisions must be given a humane and compassionate construction [11] In conclusion, the appeal is allowed, and costs are granted to the Appellant fixed in the amount of $300. Signed at Ottawa, Canada, this 17th day of June, 2003. "C.H. McArthur" J.T.C.C. CITATION: 2003TCC342 COURT FILE NO.: 2001-1335(IT)I STYLE OF CAUSE: Judy K. Seely and Her Majesty the Queen PLACE OF HEARING: Fredericton, New Brunswick DATE OF HEARING: May 15, 2002 REASONS FOR JUDGMENT BY: The Honourable Judge C.H. McArthur DATE OF JUDGMENT: May 24, 2002 APPEARANCES: Counsel for the Appellant: Richard Speight Counsel for the Respondent: Christa MacKinnon COUNSEL OF RECORD: For the Appellant: Name: Richard Speight Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada