Date: 20030609
Docket: A-132-02
Citation: 2003FCA269
CORAM: DÉCARY J.A.
EVANS J.A.
SHARLOW J.A.
BETWEEN:
CAPTAIN WILLIAM BLAGDON
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
Heard at St. John's, Newfoundland and Labrador on Monday, June 9, 2003
JUDGMENT delivered from the Bench at St. John's, Newfoundland and Labrador on Monday, June 9, 2003
REASONS FOR JUDGMENT BY: SHARLOW J.A.
Date: 20030609
Docket: A-132-02
Citation: 2003FCA269
CORAM: DÉCARY J.A.
EVANS J.A.
SHARLOW J.A.
BETWEEN:
CAPTAIN WILLIAM BLAGDON
Applicant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
(Delivered from the Bench at St. John's, Newfoundland
and Labrador on Monday, June 9, 2003)
SHARLOW J.A.
[1] This is an application for judicial review of a judgment of the Tax Court of Canada dated February 8, 2002 in an appeal by Captain Blagdon of his income tax assessment for 1999. The issue is whether paragraph 8(1)(b) of the Income Tax Act, R.S.C. 1985, c. 1 (5th supp.), entitles Captain Blagdon to a deduction for legal fees in the amount of $6,249 for representation at a Transport Canada inquiry held to consider allegations of incompetence, and $918 in connection with a wrongful dismissal suit against a former employer.
[2] Paragraph 8(1)(b) reads, as far as relevant, as follows:
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8.(1) In computing a taxpayer's income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto:
. . .
(b) amounts paid by the taxpayer in the year as or on account of legal expenses incurred by the taxpayer to collect or establish a right to salary or wages owed to the taxpayer by the employer or former employer of the taxpayer. |
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8.(1) Sont déductibles dans le calcul du revenu d'un contribuable tiré, pour une année d'imposition, d'une charge ou d'un emploi ceux des éléments suivants qu'il est raisonnable de considérer comme s'y rapportant:
. . .
(b) les sommes payées par le contribuable au cours de l'année au titre des frais judiciaires ou extrajudiciaires qu'il a engagés pour recouvrer le traitement ou salaire qui lui est dû par son employeur ou ancien employeur ou pour établir un droit à ceux-ci.
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[3] In the Transport Canada enquiry, Captain Blagdon was at risk of losing his Master's Certificate. In fact his Master's Certificate was suspended and then reinstated after he wrote an examination. His wrongful dismissal action did not result in an award of damages. It is argued by Captain Blagdon that his participation in both proceedings was to protect or restore his reputation as a competent ship's captain, thereby protecting his professional qualifications and his prospects of continuing to earn income from employment as a ship's captain.
[4] The Tax Court Judge held that paragraph 8(1)(b) did not apply to permit Captain Blagdon to deduct the legal expenses, because the proceedings in respect of which they were incurred could not establish that Captain Blagdon was owed salary or wages, and could not result in the collection of any salary or wages that he was owed. It is argued for Captain Blagdon that this is too narrow an interpretation of paragraph 8(1)(b), and that it should be interpreted to permit a deduction for legal expenses incurred to protect one's entitlement to pursue a particular livelihood.
[5] We are all of the view that the Tax Court Judge was correct in his interpretation of paragraph 8(1)(b). We do not accept that the words of paragraph 8(1)(b) can reasonably bear the interpretation proposed by counsel for Captain Blagdon. We can understand that a broad entitlement to a deduction for legal expenses for persons in the situation of Captain Blagdon might be justified on policy grounds but that is a matter for Parliament not the courts.
[6] For these reasons this application will be dismissed.
(s) "K. Sharlow"
J.A.
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-132-02
STYLE OF CAUSE: Captain William Blagdon v. The Attorney General of Canada
PLACE OF HEARING: St. John's, Newfoundland and Labrador
DATE OF HEARING: June 9, 2003
REASONS FOR JUDGMENT : Sharlow J.A.
DATED: June 9, 2003
DELIVERED FROM THE BENCH AT ST. JOHN'S, NEWFOUNDLAND AND LABRADOR ON JUNE 9, 2003
APPEARANCES:
Mr. Andrew May FOR THE APPLICANT
Clarenville, Newfoundland and Labrador
Ms. Valerie Miller FOR THE RESPONDENT
Mr. Cecil Woon
St. John's, Newfoundland and Labrador
SOLICITORS OF RECORD:
Mr. Corwin Mills, Q.C. FOR THE APPLICANT
Clarenville, Newfoundland and Labrador
Morris Rosenberg FOR THE RESPONDENT
Deputy Attorney General of Canada