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Docket: 2002-1547(IT)I |
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BETWEEN: |
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TIMOTHY FOX, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeals heard on common evidence with the appeals of Brian Richardson (2002-1548(IT)I) on March 20, 2003 at Fredericton, New Brunswick
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Before: The Honourable Judge François Angers |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Cecil Woon |
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JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1998 and 1999 taxation years are allowed and the matter is referred back to the Minister for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 20th day of May 2003.
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"François Angers" |
J.T.C.C.
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Docket: 2002-1548(IT)I |
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BETWEEN: |
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BRIAN RICHARDSON, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeals heard on common evidence with the appeals of Timothy Fox (2002-1547(IT)I) on March 20, 2003 at Fredericton, New Brunswick
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Before: The Honourable Judge François Angers |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Cecil Woon |
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JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1998 and 1999 taxation years are allowed and the matter is referred back to the Minister for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 20th day of May 2003.
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"François Angers" |
J.T.C.C.
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Citation: 2003TCC351 |
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Date: 20030520 |
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Docket: 2002-1547(IT)I |
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2002-1548(IT)I |
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BETWEEN: |
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TIMOTHY FOX, |
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BRIAN RICHARDSON, |
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Appellants, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Angers, J.T.C.C.
[1] These appeals were heard on common evidence. The appellants appealed a taxable benefit that was assessed against them by the Minister of National Revenue (the "Minister") for both the 1998 and 1999 taxation years as a result of their employment with Juniper Lumber Ltd. ("Juniper") and their use of a company-owned GMC half-ton pickup.
[2] Both appellants were at all material times employed by Juniper as forest technicians. Juniper provided the appellant Timothy Fox with a GMC pickup truck during both of the years in question. The pickup was used by him to travel from his residence to the offices of Juniper, a distance of approximately 70 kilometres one way. The other appellant, Brian Richardson, travelled with him to and from Juniper's offices approximately 95% of the time. Brian Richardson also had the use of a pickup truck but that vehicle was kept at Juniper's offices.
[3] Both appellants testified that they had never used these vehicles for personal purposes. Although one truck was used by them to travel from their residences to Juniper's offices, they also used it for picking up and delivering parcels or various parts for Juniper and for visiting different work sites before going to Juniper's offices. Neither appellant was required by Juniper to keep a logbook of these activities. It was therefore difficult for them to establish with any accuracy how many times a week they were required to run such errands for Juniper on their way to work. While most did not take them out of their way, others did.
[4] The pickup in question used by the appellants carried firefighting equipment and various other pieces of equipment necessary for their work. The appellant Timothy Fox testified that it was required that he be on call in case of emergencies and that he run errands for Juniper. It would have been impossible to provide these services with his own vehicle. The area he had to cover for Juniper was vast and most of it had to be travelled on logging roads. The pickup was also equipped with a two-way radio, which meant that he received instructions from Juniper as he operated the truck. Both appellants were also called upon to respond to forest fires two or three times a year.
[5] Although the aforementioned errands were not part of their work as forest technicians, both appellants felt that their responsibilities as employees included running these errands and executing requests by Juniper to respond to forest fires or other emergencies that may have occurred. Both also felt that they would have been fired had they not done as they were asked. Juniper's policy on the use of company vehicles prohibited employees from using them for personal purposes unless approval was obtained. Personal use was considered an exception and was not the rule.
[6] The Minister assessed both appellants under paragraph 6(1)(a) of the Income Tax Act ("Act"), which reads as follows:
(a) Value of benefits - the value of board, lodging and other benefits of any kind whatever received or enjoyed by the taxpayer in the year in respect of, in the course of, or by virtue of an office or employment, except any benefit
(i) derived from the contributions of the taxpayer's employer to or under a registered pension plan, group sickness or accident insurance plan, private health services plan, supplementary unemployment benefit plan, deferred profit sharing plan or group term life insurance policy,
(ii) under a retirement compensation arrangement, an employee benefit plan or an employee trust,
(iii) that was a benefit in respect of the use of an automobile,
(iv) derived from counselling services in respect of
(A) the mental or physical health of the taxpayer or an individual related to the taxpayer, other than a benefit attributable to an outlay or expense to which paragraph 18(1)(l) applies, or
(B) the re-employment or retirement of the taxpayer, or
(v) under a salary deferral arrangement, except to the extent that the benefit is included under this paragraph because of subsection (11).
[7] As stated, the vehicles concerned in these appeals were pickup trucks, for they could not seat more than two passengers. They were not automobiles as defined in s. 248(1) of the Act. In assessing the appellants, the Minister made no distinction between them based on who actually had the pickup in his possession and who was simply a passenger. The Minister allocated the personal travel equally between the two and reduced the distance travelled to and from their work to 24,000 kilometers for each taxation year. The rates used by the Minister are found in section 7306 of the Income Tax Regulations.
[8] The question is whether the appellants received or enjoyed in respect of, in the course of, or by virtue of their employment a benefit in the form of driving or travelling in a company vehicle to and from their work during both the 1998 and 1999 taxation years.
[9] Although no representative of Juniper testified at the trial, it is evident from the company's policy on the use of its vehicles that it did not consider travelling back and forth from home to work by its employees as personal use of the vehicles. I can only assume that the intended purpose of such use of those vehicles by Juniper's employees was to serve Juniper's needs. Travel between home and work is a personal expense, but if an employer requires that employees be on duty to meet its needs, whether these have to do with forest fires or with running simple errands that may or may not take these employees out of their way, it seems to me that the employees are in such instances on duty all the time and, more specifically, from the moment they get into the company's vehicle (here, pickup truck).
[10] The evidence clearly indicates that when the appellants drove to work, they were at Juniper's disposal. The pickup trucks were equipped with two-way radios, firefighting equipment and various parts needed for Juniper's operations. The appellants were also asked to carry other passengers to various places. As well, company pickups were used because the appellants travelled on logging roads and covered a vast area.
[11] Counsel for the respondent referred to Rioux v. Canada, [2002] T.C.J. No. 54 (2002 DTC 1357, French), a case in which Judge Tardif of this Court stated that it is not enough that one accommodate one's employer by running a few errands in one's daily travel to make it travel for business purposes. I believe that the fact situation in this appeal is different as the appellants were on call to respond to any emergencies and had to be available for their employer every day. Our fact situation is more similar to that in Anderson et al. v. The Queen, 2002 DTC 1876. In that case, the appellants were employed by a gas company and were required to take home at the end of each workday company pickup trucks used by them for their work. Those trucks were outfitted with tools and equipment related to the appellants' jobs. The appellants were on call when they drove to work and were subject to being called for emergencies. Judge Beaubier stated at paragraph 16:
. . . Once in the vehicle, the employees were on the job: they were in the employers' premises and business place and could be called there on the employers' radio in the vehicle and directed to go anywhere their employer desired . . . .
[12] Counsel for the respondent argued that the appellants were hired as forest technicians and not as delivery persons and thus deliveries were not part of their duties. The appellants on the other hand believed strongly that deliveries were part of their duties and felt that they would have been fired had they refused such errands. I accept the appellants' position and their belief in this regard. I also accept that, once in their vehicle, they were under the control of Juniper. Accordingly, I find that the appellants, when they left home to go to work, were acting in the performance of their duties, as they were required to respond to their employer's directions while driving to work. The benefit was entirely Juniper's and not the appellant's.
[13] For these reasons, the appeals are allowed.
Signed at Ottawa, Canada, this 20th day of May 2003.
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"François Angers" |
J.T.C.C.
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CITATION: |
2003TCC351 |
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COURT FILE NO.: |
2002-1547(IT)I 2002-1548(IT)I |
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STYLE OF CAUSE: |
TIMOTHY FOX, BRIAN RICHARDSON, v. Her Majesty The Queen |
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PLACE OF HEARING |
Fredericton, New Brunswick |
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DATE OF HEARING |
March 20, 2003 |
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REASONS FOR JUDGMENT BY: |
The Honourable Judge François Angers |
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DATE OF JUDGMENT |
May 20, 2003 |
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APPEARANCES: |
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For the Appellants: |
The Appellants themselves |
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Counsel for the Respondent: |
Cecil Woon |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |