Date: 20000823
Docket: 1999-4095-IT-I
BETWEEN:
DONALD W. HRYHOR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AND BETWEEN:
Docket: 1999-4096-IT-I
ENID QUINTIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
Beaubier, J.T.C.C.
[1] These appeals pursuant to the Informal Procedure for the taxpayers' 1996 and 1997 years were heard at Calgary, Alberta on July 27, 2000. The Appellants testified and the Respondent called Chiman Lee, the appeals officer in charge of these files. As a result of a series of motions by the parties, the following orders were issued at the outset:
1. Enid Quintin's appeal for 1996 was quashed because she had never filed a Notice of Objection for that year.
2. Donald W. Hryhor's appeal for 1997 is adjourned in respect to a capital gains matter that he failed to plead in his Notice of Appeal. In respect to that matter he is to file an amended Notice of Appeal on or before November 15, 2000 and the Respondent is to file a Reply thereto within 60 days thereafter.
3. The remaining matters in dispute were then ordered to be heard together on common evidence by consent of the parties.
[2] The matters remaining in issue were best detailed in the Reply to Mr. Hryhor's Notice of Appeal. Paragraphs 6 to 13, inclusive of the Reply read:
6. In computing his income tax liability for the 1996 and 1997 taxation years, the Appellant claimed, in calculating the medical expense credit, medical expenses in the amount of $39,586.22 for 1996 and $11,229.13 for 1997.
7. The original notices of assessment were dated and mailed to the Appellant on July 27, 1998 for both 1996 and 1997.
8. In assessing the Appellant for the 1996 taxation year, the Minister of National Revenue (the "Minister") reduced the claim for medical expenses by $14,846.30, from $39,586.22 to $24,739.92.
9. In assessing the Appellant for the 1997 taxation year, the Minister assessed the Appellant's claim for medical expenses as filed.
10. The Appellant has not been further reassessed for the 1997 taxation year since the original assessment dated July 27, 1998.
11. In so assessing the Appellant for the 1996 taxation year, the Minister made the following assumptions of fact:
(a) the facts admitted and stated above;
(b) expenses claimed as medical expenses that were disallowed in the amount of $12,273.55 were in respect of renovations to the home of the Appellant and his spouse;
(c) expenses claimed as medical expenses that were disallowed in the amount of $1,500.00 were in respect of the purchase of carpet and furniture;
(d) expenses claimed as medical expenses that were disallowed in the amount of $684.84 were in respect of the purchase of vitamins;
(e) expenses claimed as medical expenses that were disallowed in the amount of $216.71 were in respect of special food and clothing;
(f) expenses claimed as medical expenses that were disallowed in the amount of 171.20 were in respect of lawn care;
(g) neither the Appellant or his spouse lack normal physical development or have a severe and prolonged mobility impairment;
(h) the renovations made to the home of the Appellant and his spouse were not made to enable the Appellant or his spouse to gain access to or to be mobile or functional within their home;
(i) the expenses disallowed were not in respect of amounts paid to a medical practitioner;
(j) the expenses disallowed were not in respect of a device or equipment for use by the Appellant or his spouse that is of a prescribed kind and is prescribed by a medical practitioner;
(k) the expenses disallowed were not in respect of drugs, medicaments or other preparations or substances as prescribed by a medical practitioner and as recorded by a pharmacist;
(l) the expenses disallowed were the personal or living expenses of the Appellant and his spouse.
B. ISSUES TO BE DECIDED
12. The issues to be decided are:
(a) whether there is any issue in dispute in respect of the 1997 taxation year upon which this Court can decide; and
(b) whether the Minister properly disallowed the amount of $14,846.30 claimed as medical expenses for the 1996 taxation year.
C. STATUTORY PROVISIONS, GROUNDS RELIED ON AND RELIEF SOUGHT
13. He relies on, inter alia, section 118.2 of the Act and on regulation 5700 of Income Tax Regulations (the "Regulations") as amended for the 1996 and 1997 taxation years.
[3] In relation to issue 12(b), subsection 118.2(2), paragraphs (l.2), (m) and (n) read:
118.2 (2) For the purposes of subsection (1), a medical expense of an individual is an amount paid
...
(l.2) for reasonable expenses relating to renovations or alterations to a dwelling of the patient who lacks 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;
...
(m) for any device or equipment for use by the patient that
(i) is of a prescribed kind,
(ii) is prescribed by a medical practitioner,
(iii) is not described in any other paragraph of this subsection, and
(iv) meets such conditions as are prescribed as to its use or the reason for its acquisition;
to the extent that the amount so paid does not exceed the amount, if any, prescribed in respect of the device or equipment;
(n) for drugs, medicaments or other preparations or substances (other than those described in paragraph (k)) manufactured, sold or represented for use in the diagnosis, treatment or prevention of a disease, disorder, abnormal physical state, or the symptoms thereof or in restoring, correcting or modifying an organic function, purchased for use by the patient as prescribed by a medical practitioner or dentist and as recorded by a pharmacist;
[4] "Device or equipment" in paragraph (m) is defined in Regulation LVII, Sec. 5700. In particular, clothing costs of $216.71 and lawn care of $171.20 are not within the particulars set out in subsection 118.2(2). Vitamins of $684.84 do not, of themselves, fall within paragraph (n) since they were not "manufactured, sold or represented for use in the diagnosis, treatment or prevention of a disease, disorder" etc. as stated therein. Rather, they are a food or a dietary supplement. Similarly the claim respecting carpet and furniture does not fall within any of the paragraphs quoted in subsection 118.2(2) and in particular, carpets in the amount of $1,500, and furniture are not renovations or alterations to a dwelling; rather they are chattels.
[5] The expenses claimed of $12,273.55, which were in respect of renovations to the home of the Appellants, are therefore the only matter which remains in dispute for adjudication between the parties. This turns on paragraph 118(2)(1.2). Paragraph (l.2) raises the following questions in this appeal.
1. Were the expenses of $12,273.55 reasonable?
2. Did either Appellant,
(a) lack normal physical development or,
(b) have a severe and prolonged mobility impairment?
3. Were the renovations or alterations to enable the patient to be functional within the dwelling?
[6] The $12,173.55 was allegedly spent to renovate or alter the Appellants' dwelling so as to remove mold, which had invaded the house behind wall surfaces and below flooring. At that time they were both patients of Dr. Logan Stanfield who is now dead. Dr. Stanfield had attended at their dwelling with an environmental expert prior to the end of 1996 respecting mold. Ms. Quintin and Mr. Hryhor were found by Dr. Stanfield to be supersensitive to hydrocarbons, methane and to the mold and the repairs were necessary to get rid of the mold. In doing so products made of hydrocarbons were not used.
[7] An unspecified part of the $12,173.55 was for the installation of a hot tub and renovations for that purpose and for ceramic tile around that. These had nothing to do with the renovation or alternations required because of the supersensitivities of the Appellants; they were to purchase and install the hot tub. The total sum of the necessary plumbing, hot water heater, electrical, carpentry and ceramic work and other associated costs were not established by the Appellants. However, it will be appreciated that they were very substantial.
[8] The onus is on the Appellants to establish the reasonableness of the $12,173.55. Their failure to distinguish and remove these costs from the total of $12,173.55 is fatal to their claims respecting reasonable expenses. Moreover, while the hot tub may have alleviated certain other complaints of either or both of the Appellants, it did not enable either of them to be functional within the dwelling.
[9] For these reasons, the appeal of Enid Quintin is dismissed in its entirety and the appeal of Donald Hryhor is dismissed for the year 1996.
Signed at Vancouver, British Columbia this 23rd day of August, 2000.
"D. W. Beaubier"
J.T.C.C.
COURT FILE NO.: 1999-4095(IT)I and 1999-4096(IT)I
STYLE OF CAUSE: Donald W. Hryhor v. The Queen
and Enid Quintin v. The Queen
PLACE OF HEARING: Calgary, Alberta
DATE OF HEARING: July 27, 2000
REASONS FOR JUDGMENT BY: The Honourable Judge D.W. Beaubier
DATE OF JUDGMENT: August 23, 2000
APPEARANCES:
For the Appellants: The Appellants themselves
Counsel for the Respondent: Gwen Mah
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-4095(IT)I
BETWEEN:
DONALD W. HRYHOR,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of
Enid Quintin (1999-4096(IT)I), at Calgary, Alberta on July 27, 2000 by
the Honourable Judge D. W. Beaubier
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Gwen Mah
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1996 taxation year is dismissed in accordance with the attached Reasons for Judgment.
The appeal from the assessment made under the Income Tax Act for the 1997 taxation year is adjourned pursuant to the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 23rd day of August, 2000.
|
"D. W. Beaubier" |
J.T.C.C.
1999-4096(IT)I
BETWEEN:
ENID QUINTIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of
Donald W. Hryhor (1999-4095(IT)I), at Calgary, Alberta on July 27, 2000 by
the Honourable Judge D. W. Beaubier
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Gwen Mah
JUDGMENT
The purported appeal from the assessment made under the Income Tax Act for the 1996 is quashed.
The appeal from the assessment for the 1997 taxation year is dismissed in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 23rd day of August, 2000.
|
"D. W. Beaubier" |
J.T.C.C.