Date: 20020624
Docket: 2001-3700-IT-I
BETWEEN:
PHILLIP J. STEELE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
Miller, J.
[1] These appeals by Phillip J. Steele by way of informal procedure are to set aside the assessment of the Minister of National Revenue (the Minister) denying him the disability tax credit for the 1999 and 2000 taxation years. Mr. Steele resides in Australia. He was unable to attend in Canada for hearing of this matter so submissions by the parties were made in writing. This approach has unfortunately not afforded me the opportunity to observe Mr. Steele personally, however, I believe that the documents agreed to be submitted by Mr. Steele and the Respondent satisfactorily describe the situation. In any event, it is not my role to diagnose Mr. Steele. I am to take what the physicians have provided and apply legal principles to the circumstances described in determining if Mr. Steele qualifies for disability tax credits.
[2] There is no dispute that Mr. Steele has bipolar affective disorder. He has suffered from this mental illness for over 20 years. He has been unable to work and lives at home with his mother. As one physician expressed it, he requires a quiet environment. Mr. Steele claimed a disability tax credit for 1999 and 2000. He has relied upon two disability tax credit certificates, one dated September 6, 2000 and the other dated June 22, 2001, both of which were signed by Dr. Robert Ah Hoon. In these appeals, he has also presented a letter from Dr. J. Earl, Principal House Officer - Psychiatry, Coastal Community Adult Mental Health Service of Queensland dated February 1, 2002. Mr. Steele maintains he is unable to remember substantially all of the time and indeed cannot remember matters from one day to the next and forgets simple daily things.
[3] The Respondent has relied upon two follow-up questionnaires sent to Dr. Ah Hoon by Canada Customs and Revenue Agency (CCRA) dated October 10, 2000 and April 4, 2001 as well as one follow-up questionnaire from the Department of Justice provided by Dr. Ah Hoon dated February 26, 2002.
[4] I will set out what I believe to be the salient points from each of these documents.
(i) Disability Tax Credit Certificate signed by Dr. Ah Hoon on September 6, 2000:
Q. Is your patient able to think, perceive, and remember, using medication or therapy if necessary?
A. No.
Q. Has the impairment lasted, or is it expected to last, for a continuous period of at least 12 months?
A. Yes.
Q. Is the impairment severe enough to restrict the basic activity(ies) of daily living identified above all, or almost all, the time, even with therapy and the use of appropriate aids and medication?
A. Yes.
(ii) CCRA's questionnaire completed by Dr. Ah Hoon on October 10, 2000.
Q. Could your patient understand the concepts of time, danger, or money?
A. Yes.
Q. Did your patient need constant supervision for his personal care activities?
A. No.
Q. Was your patient able to work?
A. No.
Q. Did your patient attend therapy?
A. Yes.
Q. Did your patient require medication?
A. Yes.
Q. Was your patient's condition or impairment controlled with medication or therapy?
A. Partially.
Q. For the year 1999, what percentage of time was your patient UNABLE to think, perceive and remember, even with the use of medication or therapy
A. 25%.
Q. Do you expect the severity of your patient's functional limitations will change?
A. No.
(iii) CCRA's questionnaire completed by Dr. Ah Hoon on April 4, 2001:
Q. Could your patient understand the concepts of time, danger, or money?
A. Not when manic or severely depressed.
Q. Did your patient's condition restrict the ability to operate a motor vehicle?
A. No.
Q. Would your patient be able to live independently?
A. No.
Q. Did your patient need constant supervision for his personal care activities?
A. No.
Q. Please indicate who provided the supervision and how frequently?
A. Does not need constant supervision of care activity.
Q. For the year 1999, what percentage of time was your patient UNABLE to think, perceive and remember, even with the use of medication for therapy.
A. 40%.
Other comments: Patient has a severe mental illness - hospitalized 33 times in 13 years, currently still living with his mother.
(iv) Disability Tax Credit Certificate signed June 22, 2001 by Dr. Ah Hoon.
Q. Can your patient perceive, think and remember?
Answer no only if, all or almost all the time, even with therapy, medication, or a device, your patient cannot perceive, think, and remember. For example, answer no if he or she cannot manage or initiate personal care without constant supervision.
A. No.
Q. Has your patient's ... marked restriction in a basic activity of daily living ... lasted, or is expected to last, for a continuous period of at least 12 months?
A. No.
Q. Is the impairment likely to improve sufficiently such that the patient may no longer be ... markedly restricted in a basic activity of daily living?
No answer.
Diagnosis:
Bipolar Affective Disorder (Severe mental illness) (Hospitalized 33 times in 13 years - No admission past 2 years)
(v) Letter dated February 1, 2002 from Dr. J. Earl, Principal House Officer - Psychiatry, Coastal Community Adult Mental Health Service:
Re: Phillip John STEELE
This gentleman suffers from a prolonged and severe mental illness. As a result of his condition his thinking and perception are impaired for up to 40% of the time. It is also noted that he has extensive memory difficulties and requires everything to be written down in order for him to remember. He was first diagnosed in 1980 and has been hospitalised 33 times in the last 12 years for mania and depression. He only recently became a client of our service but was in the Prince Charles Hospital community mental health service for six years prior to this. His condition is likely to persist long term.
(vi) Completion of Department of Justice questionnaire by Dr. Ah Hoon signed February 26, 2002.
Q. Was Mr. Steele able to function well enough to engage in routine tasks such as:
a) going to the grocery store; Yes
b) doing household chores; Yes
c) preparing meals for himself; Unknown, lived with his mother
d) dressing himself; Yes
e) having conversation with other people; Yes
Q. Did Mr. Steele have periods of acute illness in 1999 and 2000 and if so how long did they last?
A. Episodic depressive episodes (mild to moderate) lasting up to 2 weeks at a time.
Q. Did Mr. Steele have periods in 1999 and 2000 in which he was able to remember, perceive and think normally and if so how long did these periods last?
A. Yes - impaired during depressive episodes.
Q. Did Mr. Steele take medication to control his illness in 1999 and 2000 and if so how effective was this medication?
A. Yes. Quite successful - No hospitalization during 1999 or 2000.
Q. Mr. Steele claims to have been unable to remember 90% of the time in 1999 and 2000. Is this accurate? If not, could you please indicate the extent, if any of Mr. Steele's memory problems e.g. are both his short term and long term memory impaired? Is Mr. Steele simply absent minded or does he have difficulty remembering things such as what he did one day earlier, the fact he has left the oven on etc.
A. Mr. Steele did complain of poor memory - may have been related to alcohol use of 5 standard drinks per day for greater than 30 years. I doubt that claim to be unable to remember 90% of the time in 1999/2000 is accurate. When tested by me formally on June 13, 2001 - minor memory deficits detected only.
[5] The provisions for the disability tax credit are found in sections 118.3 and 118.4 of the Income Tax Act (the Act) which read as follows:
118.3. Where
(a) an individual has a severe and prolonged mental or physical impairment,
(a.1) the effects of the impairment are such that the individual's ability to perform a basic activity of daily living is markedly restricted.
(a.2) in the case of
...
(iv) an impairment with respect to an individual's ability in perceiving, thinking and remembering, a medical doctor or a psychologist, and
has certified in prescribed form that the impairment is a severe and prolonged mental or physical impairment the effects of which are such that the individual's ability to perform a basic activity of daily living is markedly restricted
(b) the individual has filed for a taxation year with the Minister the certificate described in paragraph (a.2), and
(c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year by the individual or by any other person,
for the purposes of computing the tax payable under this Part by the individual for the year, there may be deducted an amount determined by the formula ...
118.4(1) For the purposes of subsection 6(16), sections 118.2 and 118.3 and this subsection,
(a) an impairment is prolonged where it has lasted, or can reasonably be expected to last, for a continuous period of at least 12 months;
(b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living;
(c) a basic activity of daily living in relation to an individual means
(i) perceiving, thinking and remembering,
...
(d) for greater certainty, no other activity, including working, housekeeping or a social or recreational activity, shall be considered as a basic activity of daily living.
[6] Section 118.3 of the Act lists three requirements to claim a disability tax credit:
a) The individual must have a severe and prolonged mental or physical impairment;
b) The effects of the impairment are such that his ability to perform a basic activity of daily living is markedly restricted;
c) He must provide a doctor's certificate certifying 1 and 2.
So, even if I find that conditions 1 and 2 have been met, for Mr. Steele to succeed in these appeals, I must still find that a physician has certified that Mr. Steele was unable to remember substantially all of the time. Putting this conversely, if I find Mr. Steele has presented a doctor's certificate complying with section 118.3 (a positive certificate), can I then turn around and say no, the doctor must be wrong; in my view, Mr. Steele does not have a severe and prolonged impairment, or if he does, the effect of it does not render him unable to remember substantially all of the time (i.e. he has not met one or both of the first two conditions). That appears to be what the Respondent is asking me to do. I read the Respondent's argument as firstly requesting that I interpret the disability tax credit certificates of Dr. Ah Hoon as negative certificates, which would end the matter and, secondly, should I find the certificates are positive certificates, to then find that one or both of the first two conditions have not been met.
[7] I will deal first with the issue of whether there is a positive section 118.3 medical certificate. The first disability tax credit certificate of September 6, 2000 is completely unambiguous. It states that Mr. Steele is unable to think, perceive and remember, the impairment has lasted for a continuous period of 12 months and is severe enough to restrict the basic activity almost all the time. Before the second certificate, Dr. Ah Hoon completed two questionnaires, which the Respondent claims clarifies the certificate to the point that Dr. Ah Hoon must have erred in the first certificate. I do not draw the same inference from these questionnaires that Dr. Ah Hoon erred in his answers in the first certificate. He certainly does not explicitly indicate any mistake in the certificate. Indeed, subsequent to these questionnaires he again completes a second certificate of June 22, 2001, certifying Mr. Steele cannot perceive, think and remember almost all the time. There is some ambiguity in this second certificate as Dr. Ah Hoon answers no to the question, "Has your patient's marked restriction in a basic activity of daily living lasted, or is expected to last, for a continuous period of at least 12 months?", yet Dr. Ah Hoon does not answer the second part of the "Duration" section which reads: "Is the impairment likely to improve sufficiently such that the patient may no longer be markedly restricted in a basic activity of daily living, or need life-sustaining therapy (as outlined above)?".
[8] I find some real confusion in the drafting of this part of the certificate which deals with the prolonged nature of the impairment. The question reads:
Has your patient's marked restriction in a basic activity of daily living lasted or is expected to last for a continuous period of 12 months?
The definition of "prolonged" in section 118.4 reads:
an impairment is prolonged where it has lasted, or can reasonably be expected to last, for a continuous period of at least 12 months.
The impairment must surely be the disease or illness from which the individual suffers. The effect of the impairment must be that it markedly restricts the basic activity of daily living such as remembering. The question in the certificate confuses the marked restriction and the impairment. It is the impairment, that is the mental illness, which must be prolonged, not necessarily the marked restriction. I respectfully suggest the question does not reflect the legislation and is indeed misleading. This becomes most significant when dealing with a disease such as bipolar affective disorder.[1]
[9] In the first certificate, where the question is indeed in keeping with the Act, Dr. Ah Hoon said yes to the prolonged nature of the impairment, and in the second certificate he said no, though went on to indicate in that same certificate that Mr. Steele had been hospitalized 33 times in 13 years though no admissions in the past two years. The Minister's response to this certificate was to confirm the disallowance. As the Respondent stated in his written submissions:
In response to the denial of a DTC for 1999 and 2000, the Appellant submitted a second DTC certificate dated June 22, 2001. That certificate, was also signed by Dr. Hoon and stated that the Appellant was unable to think, perceive and remember almost all of the time.
The Minister was not satisfied that the Appellant's condition rendered him unable to think, perceive or remember almost all of the time and confirmed the disallowance of the DTC for 1999 or 2000.
[10] Once again the Government, now the Department of Justice, attempts to clarify the certificate presumably on the correct assumption that it would be highly unlikely an Australian doctor would appear in a Canadian Tax Court. While I recognize the Appellant was prepared to have the written responses of Dr. Ah Hoon put before me in this matter, it clearly presents a dilemma as to how much reliance to put upon such material, given no opportunity for cross-examination. Nowhere in these follow-up questions by the Department of Justice does Dr. Ah Hoon explicitly indicate that he completed the certificate incorrectly.
[11] Dr. Ah Hoon has twice completed the prescribed certificate stating Mr. Steele's mental impairment is severe enough to restrict the basic activity of daily living almost all the time. There is nothing ambiguous in those responses, nor do I read Dr. Ah Hoon's answer to subsequent questionnaires as any acknowledgement that he has made a mistake on the certificates. I therefore see no reason to interfere with that aspect of the certificates.
[12] With respect to the ambiguity in the second certificate regarding the prolonged duration of the mental impairment, I find nothing in any of Dr. Ah Hoon's follow-up questionnaires which indicate Mr. Steele's suffering with bipolar affective disorder was not prolonged. The reports all suggest a long-term and ongoing suffering of bipolar affective disorder. The combination of the confusing nature of the form of question in the second certificate and the fact Dr. Ah Hoon did not answer the second part of the 'Duration' section leads me to discount the value of that certificate. I rely primarily on the first certificate for the purpose of meeting the third condition required under section 118.3 of the Act for a medical certificate. If I had to rely on the second certificate, I would interpret that certificate as a positive certificate due to the misleading nature of the question posed. Dr. Ah Hoon was answering a question dealing with the continuous nature of the marked restriction not the impairment itself. His responses to the questionnaires confirmed the impairment was prolonged.
[13] Now it reverts back to me to determine if the first two conditions of section 118.3 of the Act have been met, even though I find I have a certificate as required by the third condition. I will deal first with the issue of a prolonged impairment. The very nature of the bipolar affective disorder, in my non-medical understanding of it, is that the individual suffers periods of manic behaviour and periods of depressive behaviour. This disorder itself does not go away - it is continuous. The acute manifestations of the disease appear in the form of episodes of one extreme or the other. I am satisfied from a review of Dr. Ah Hoon's and Dr. Earl's explanations that the impairment suffered by Mr. Steele is prolonged as defined in the Act. He has suffered the impairment for many years and there is no indication it is going to go away.
[14] With respect to the second condition requiring a finding that Mr. Steele cannot remember substantially all of the time, I have some difficulty. Given that the definition of "a basic activity" includes thinking, perceiving and remembering, and given Associate Chief Judge Bowman's finding in the Radage[2] case that each of these three characteristics qualifies as a basic activity, I will recite what the legislation requires for a marked restriction on a basic activity, as follows:
An individual's ability to remember is markedly restricted only where substantially all of the time the individual is unable to think, perceive or remember.
[15] A definition of "remembering" is not as integral to making a determination of an individual's ability to remember, as is the individual's own assessment, supported or rejected by friends and family as well as by qualified caregivers. The latter is a requirement of the Act, which I can only surmise was incorporated into the Act based on an understanding that the medical profession is best able to identify how much of the time an individual can remember. I remain just a bit sceptical that the medical profession has advanced to the point that the complexities of the brain's receipt, storage and retrieval of data can be identified with such an accuracy that would allow a psychiatrist to proclaim that an individual is unable to remember 25%, 50% or 90% of the time. However, the legislation demands a finding that substantially all of the time, Mr. Steele is unable to perform this basic activity of daily living.
[16] Notwithstanding Dr. Ah Hoon twice filled in certificates certifying Mr. Steele could not remember substantially all the time, his follow-up answers are not entirely supportive, though not so contrary for me to interpret the positive certificate on this point as a negative certificate. To appreciate what is required for a court to make such a contrary finding I refer to the recent Federal Court of Appeal decision in Buchanan,[3] which interpreted Judge Campbell's decision in the Tax Court as doing just that. In that case, a negative certificate was found to be positive on the basis that the physician had applied a blatant misunderstanding to what the certificate questions really meant. Had he appreciated the true legal nature, the answers would clearly have been different and therefore the certificate could be interpreted as a positive certificate.
[17] In this case, I am guided by principles laid down by Associate Chief Judge Bowman in the Radage decision, specifically the following:
(a) The legislative intent appears to be to provide a modest amount of tax 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.
(b) The court must, while recognizing the narrowness of the tests enumerated in sections 118.3 and 118.4, construe the provisions liberally, humanely and compassionately and not narrowly and technically. ...
(c) If there is doubt on which side of the line a claimant falls, that doubt should be resolved in favour of the claimant.
[18] While there is some question as to the degree of restriction on his memory, I give the benefit to Mr. Steele, primarily based on Dr. Earl's letter that stated Mr. Steele:
... has extensive memory difficulties and requires everything to be written down in order for him to remember.
This does not sound like mere absentmindedness. Dr. Ah Hoon, on the written questionnaire from the Department of Justice, indicated he doubted Mr. Steele's claim to be unable to remember 90% of the time. This possible doubt did not cause Dr. Ah Hoon to alter his certificate regarding Mr. Steele's ability to remember. Indeed, Dr. Ah Hoon did indicate a 40% failure to remember rate. I cannot tell from the fact that he gave 40% as the percentage of time Mr. Steele was unable to think, perceive and remember whether he meant (a) on any reception of data by Mr. Steele, there is a 40% chance he will forget it; (b) 60% of the year or 7 months of the year, Mr. Steele can remember everything; (c) four out of every ten days, he forgets everything; or (d) only during manic or depressed episodes which cover about 40% of the time can he not remember anything. Given Mr. Steele's submission that for years he has been unable to remember from one day to the next, I am inclined to accept alternative (a) as the most likely interpretation. What a tremendous handicap that is, not knowing for every bit of information received whether your brain will or will not be able to store and retrieve it. It is no wonder everything had to be written down. I therefore do not accept the 40% answer of Dr. Ah Hoon's as in any way negating a finding that Mr. Steele's basic activity of daily living, being thinking, perceiving and remembering, was restricted substantially all of the time.
[19] For these reasons, while there is doubt, I resolve the doubt in favour of the taxpayer.
[20] The Respondent referred me to another bipolar affective disorder case, Larivière,[4] in which Judge Mogan found the Appellant was not sufficiently impaired to qualify for the disability tax credit. In that case, however. the doctor involved answered yes to the question, "Is your patient able to perceive, think or remember?" In the case before me, Dr. Ah Hoon has consistently answered no to those questions.
[21] In summary, I am not prepared to interpret the first certificate by Dr. Ah Hoon in any way other than as it is answered, as a positive certificate. With respect to the second certificate, I find the awkward and imperfect wording of the question dealing with the duration of the impairment, plus Dr. Ah Hoon's failure to answer part of that section create an ambiguity in the certificate which again I resolve in favour of the taxpayer due to a clear and unambiguous first certificate, and due to no compelling evidence from Dr. Ah Hoon to clearly contradict the first certificate. The recent Federal Court of Appeal decision of Buchanan, supra, confirms that a positive physician's certificate remains a condition of section 118.3 of the Act for an individual to successfully claim a disability tax credit. However, a certificate can be proven to be not what it purports to be in special circumstances; thus the original negative certificate in the Buchanan case was found to be a positive certificate, after having heard evidence of the physician. As Justice Stone indicated:
The Court must be faithful to the words of the Income Tax Act. The Act requires the positive certificate of a physician. That means that the function of the Tax Court Judge is not to substitute his or her opinion for that of a physician, but to determine, based on medical evidence, whether a negative certificate should be treated as a positive certificate.
I do not take this to mean, however, that the Tax Court judge cannot still find a taxpayer does not qualify for the disability tax credit notwithstanding a physician's positive certificate. The words of the Act in section 118.3 specifically require the three conditions I mentioned at the outset. The certificate is only one of those conditions. Naturally, I will be influenced by a physician's positive certificate, however, as in this case, I believe I still must make a finding on the first two conditions.
[22] In Mr. Steele's case, I accept the first certificate as having met the necessary requirements of the Act. I also have found that the first two conditions, being the prolonged nature of the impairment and the marked restriction on Mr. Steele's ability to remember have both been met and I therefore allow the appeals and refer the matter back to the Minister for reassessment on the basis that Mr. Steele is entitled to the disability tax credit in each year.
Signed at Ottawa, Canada, this 24th day of June, 2002.
"Campbell J. Miller"
J.T.C.C.
COURT FILE NO.: 2001-3700(IT)I
STYLE OF CAUSE: Phillip J. Steele v. The Queen
PLACE OF HEARING:
DATE OF HEARING:
REASONS FOR JUDGMENT BY: The Honourable Judge Campbell J. Miller
DATE OF JUDGMENT: June 24, 2002
PARTICIPANTS:
For the Appellant: The Appellant himself
Counsel for the Respondent: Michael Ezri
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm: N/A
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-3700(IT)I
BETWEEN:
PHILLIP J. STEELE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals determined from written submissions of the parties by
The Honourable Judge Campbell J. Miller
Participants
For the Appellant: The Appellant himself
Counsel for the Respondent: Michael Ezri
JUDGMENT
The appeals from assessments of tax made under the Income Tax Act for the 1999 and 2000 taxation years are allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant is entitled to claim a disability tax credit in each year.
Signed at Ottawa, Canada, this 24th day of June, 2002.
|
"Campbell J. Miller" |
J.T.C.C.
[1] One can easily imagine a situation where a prolonged impairment such as bipolar affective disorder may have a three or four week period of what I will call normalcy. This may break the continuous period of a marked restriction, yet not the continuous period of the impairment itself. The marked restriction could be such that the test of an inability to remember substantially all the time is still met. Such an individual, deserving of a disability tax credit, may be robbed of such by the incorrectly worded question in the certificate.
[2] Radage v. The Queen, 96 DTC 1615.
[3] Buchanan v. The Queen, Docket: A-416-01 dated May 31, 2002.
[4] Larivière v. The Queen, [1995] 2 C.T.C. 2742.