Tax Court of Canada Judgments

Date: 20000214

Docket: 98-2823-IT-I

BETWEEN:

JAYANT RADIA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Bowie J.T.C.C.

[1] In filing his return under the Income Tax Act (the Act) for the 1996 taxation year, the Appellant claimed non-refundable disability tax credits in respect of both his wife and his son. At the hearing before me, he abandoned the claim in respect of his son, but pursued that in respect of his wife. It is not disputed by the Respondent that the Appellant would be entitled to have the full amount of the credit in respect of his wife transferred to him pursuant to section 118.8, as she has no income tax payable for the year.

[2] Section 118.3 of the Act provides that the entitlement to receive the disability tax credit provided for in that section is conditional upon, among other things, filing a satisfactory certification of the disability in a prescribed form completed by a medical practitioner. However, the practice of the Minister of National Revenue has been that where a permanent disability has once been established, the taxpayer is not required to file the prescribed form each year, unless either there is a change in the circumstances of the individual, or the Minister specifically requires it to be filed.[1] The Appellant's wife has suffered from schizophrenia since at least 1988. A satisfactory medical certificate filed for the 1988 taxation year established that her mental disability met the requirements of sections 118.3 and 118.4. Pursuant to the practice, the Appellant received the credit for the 1988 taxation year, and he continued to receive it annually, until 1995, without the need to file a new certificate each year. He was, however, required by the Minister to file a new certificate in respect of the 1996 taxation year, and when he failed to do so, his claim for the credit was denied.

[3] The Appellant testified that his wife's condition has not improved since 1988. It is clear from his evidence that she has no touch with reality, and that she does in fact meet the requirements of the Act, in that she does not have the ability to think, perceive and remember. She suffers from a permanent disability which markedly restricts her ability to perform the basic activities of daily living, as that expression is defined in section 118.4 of the Act. He also testified that, try as he might, he has been unable to persuade her to attend a medical appointment, either for treatment, or to permit a physician to examine her with a view to completing the prescribed form that the Minister has now required him to file. On one occasion, when he attempted to take her to an appointment with the doctor, she attempted to jump out of the car while it was moving. On another occasion, when he suggested that he would take her to see the doctor, she threatened to jump from the balcony of their apartment. Nor has he been able to have a doctor examine his wife at home for the purpose of making the prescribed certificate.

[4] I found the Appellant to be a sincere and credible witness. I do not believe that he was exaggerating either the severity of his wife's condition, or the lengths to which she would go in order to avoid seeing a doctor. I accept his contention that, as a practical matter, it is impossible for him to obtain the required certificate, although his wife's medical condition falls within the defined ambit of the expression "severe and prolonged mental or physical impairment".

[5] Counsel for the Respondent did not challenge the Appellant's version of these facts, but simply rested her case upon the recent decision of the Federal Court of Appeal in the cases of MacIsaac v. Canada and Morrison v. Canada.[2] The Court held there that for a taxpayer to become entitled to the disability tax credit

... there must be a certificate by the doctor that the individual suffers impairments in the language of ... [subsections 118.3(1) and 118.4(1)]

The Court considered itself to be bound by the earlier decision[3] of a different panel of the same Court, which had upheld the conclusion of Lamarre Proulx J. of this Court that "... a certificate from a medical doctor was a prerequisite for obtaining the disability credit created by section 118.3 ...". The subsection in question reads as follows:

118.3(1) 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

(i) a sight impairment, a medical doctor or an optometrist,

(ii) a hearing impairment, a medical doctor or an audiologist, and

(iii) an impairment not referred to in subparagraphs (i) or (ii), a medical doctor

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 ...

[6] In recent decisions,[4] the Federal Court of Appeal has approved the humane and compassionate approach to the interpretation of sections 118.3 and 118.4 which was developed by Judge Bowman in such cases as Noseworthy,[5] Cotterell,[6] Radage,[7] and Lawlor.[8] However, the language of the subsection, although no model of simplicity and clarity, admits of no ambiguity as to the requirement that each of the five conditions set out there must be satisfied before the taxpayer is entitled to the tax credit. The unusual facts of this case cry out for relief. However, it is not for the courts to provide that relief, in the face of statutory requirements which the Appellant simply cannot meet. The Financial Administration Act[9] gives the Governor in Council, on the recommendation of the appropriate Minister, very broad powers to remit taxes where it would be unreasonable, unjust, or otherwise not in the public interest to collect them. I cannot arrogate that power to myself.

[7] It is with regret that I dismiss the appeal.

Signed at Ottawa, Canada, this 14th day of February, 2000.

"E.A. Bowie"

J.T.C.C.

---