|
Citation: 2003TCC160 |
|
Date: 20030409 |
|
Dockets: 2002-3267(IT)I 2002-3269(IT)I 2002-3270(IT)I 2002-3271(IT)I 2002-3272(IT)I 2002-3273(IT)I |
|
BETWEEN: |
|
MARIE CAMPBELL, DAVID AUSTEN, HAZEL KENNEDY, GEORGE KEHOE, ALLAN ARMSWORTHY, MARY JESS MACDONALD, |
|
Appellants, |
|
and |
|
|
|
HER MAJESTY THE QUEEN, |
|
Respondent. |
____________________________________________________________________
Counsel for the Appellants: Bruce S. Russell
Counsel for the Respondent: Dominique Gallant
____________________________________________________________________
REASONS FOR JUDGMENT
(Delivered orally from the Bench at Halifax, Nova Scotia, on
Wednesday, February 26, 2003 and revised as to style and syntax at
Ottawa, Canada on April 9, 2003.)
Margeson, J.T.C.C.
[1] The matters before the Court at this time for decision are Marie Campbell and Her Masjety The Queen, 2002-3267(IT)I; David Austen and Her Majesty The Queen, 2002-3269(IT)I; Hazel Kennedy and Her Majesty The Queen, 2002-3270(IT)I; George Kehoe and Her Majesty The Queen, 2002-3271(IT)I; Allan Armsworthy and Her Majesty The Queen, 2002-3272(IT)I and Mary Jess MacDonald and Her Majesty The Queen, 2002-3273(IT)I. It was agreed at the outset that all of these matters would be heard on common evidence and the Court proceeded on that basis.
[2] The facts are not in dispute and can be briefly stated as follows:
. . . . .
b) at all material times, the Appellants held an office with the Strait Regional School Board (the "School Board").
c) The Appellants received an annual stipend of $7,200 from the School Board.
d) The Appellants received a T4 from the School Board for the taxable portion of the stipend, $4,800.
e) The Appellants reported only the $4,800 of the $7,200 in each of the 1998 and 1999 taxation years.
f) The Appellants maintained an office in their homes.
g) The Appellants' home offices were their main bases from which they performed their duties and were a regular place of work.
h) The School Board had its main office in Port Hastings, Nova Scotia (the "School Board Building").
i) The Appellants did not maintain an office at the School Board Building.
j) The Appellants were required to attend regularly scheduled meetings each month at the School Board Building as part of their regular duties.
k) The School Board Building was a regular place of work for the Appellants.
l) The Appellants received a travel allowance calculated on a per kilometer basis from the School Board with respect to attendance at the Meetings in the years in question.
m) The Appellants did not include the travel allowance in their income in the years in question.
Issues
[3] The Respondent contended that the travel between the Appellants' home offices and the School Board Building to attend the Meetings was personal travel and that the amounts received in 1998 and 1999 for travel were benefits conferred upon the Appellants by the School Board and therefore are taxable under the provisions of paragraph 6(1)(b) of the Income Tax Act, ("Act").
[4] The Appellants submitted that their automobile travels in 1998 and 1999 between their offices located in their houses and the Strait Regional School Board's administration building in Port Hastings, for which they received a per kilometre allowance from the School Board, was travel, "in the performance of the duties of the Appellants' office" as members of that School Board, pursuant to subparagraph 6(1)(b)(vii.1) of the Act and that they were exempt from taxation.
[5] The Court is satisfied that the witnesses who testified were very straightforward. It accepts their evidence. There is no question at all that these were not personal or living expenses. They were, in fact, in compliance with subparagraph 6(1)(b)(vii.1) of the Act. That subparagraph exempts
(vii.1) reasonable allowances for the use of a motor vehicle received by an employee (other than an employee employed in connection with the selling of property or the negotiating of contracts for the employer) from the employer for travelling in the performance of the duties of the office or employment.
Therefore, they are exempt from the Appellants' income.
[6] There was very little by way of presumptions in the Reply to the Notice of Appeal ("Reply"), that have not been agreed upon and the Court can find very little, if anything, in the Reply which would give the Minister very much comfort in reaching the decision that he did that these amounts were personal in nature.
[7] In paragraph 10(f) of the Reply, it is admitted that the Appellants maintained an office in their homes. That is unquestionably correct. The evidence establishes that beyond any doubt at all. The Court is satisfied that there was an office in each of their homes where they performed extensive work for the purposes of their position, that is, as members of the School Board.
[8] In paragraph 10(g) of the Reply it was admitted that the Appellants' home offices were their main bases from which they performed their duties and were regular places of work. That has been established on the evidence. That assists the Appellants in their appeals.
[9] Paragraph 10(i) stated that the Appellants did not maintain offices at the School Board building. The Court is satisfied that that was the case. That is of great assistance to the Appellants. The Court is satisfied on the basis of the evidence that it would not be practical to do so.
[10] Paragraph 10(k) admits that the School Board building was a regular place of work for the Appellants. There is no doubt about that. That was a regular place of work, but their offices in their homes also were regular places of work for each of the Appellants. When they travelled from the place where they resided they actually were travelling from one work place to another work place. They kept a portion of that residence separate and apart for an office.
[11] In making the decision that he did the Minister was obviously influenced by the fact that the offices were in their homes. The Court can see no difference in having those offices in the home rather than having them 10 feet down the street or 100 yards down the street which, according to the evidence, would have been unreasonable, would have been too expensive and they would not have been any further ahead.
[12] The Court cannot find that just because their offices happen to be in the home that thereby the Minister should conclude or the Court should conclude that they must have been on personal business when they left that place and went somewhere else or when they come back to that place.
[13] The evidence established beyond any doubt that when they left their offices in their homes and went to some other place to conduct business they were going from one place of business to another place of business and they did so when they were returning to their home offices. The Court does not consider it significant that after they came home they might have gone to bed or turned on the TV or had a sandwich or raided the refrigerator, whatever the case may be. That does not militate against a finding that they were involved in business related activities on the way home.
[14] When they went from their home office to the School Board in Port Hastings, they were engaged in carrying out their duties of a School Board member and they were doing the same thing when they were on their way home. They come squarely within the provisions of subparagraph 6(1)(b)(vii.1) of the Act.
[15] In R. v. Deimert, 75 DTC 262, page 10, paragraph 38 says:
It is a variant on the category of itinerant jobs that the concept of two places of work has been introduced particularly in Owen v. Pook, [1969] 2 All E.R. 1, and Taylor v. Provan, [1974] 1 All E.R. 1201, both decided by the House of Lords. Basically, that variant is that if a man has to travel from one place of work to another place of work he may deduct the expense of this travel because he is travelling on his work, but not those of travelling from either place of work to his home or vice versa unless his home happens to be a place of work. For this concept to apply, the facts must be that the work or the job must be done in two places. It is not enough that the man might choose to do part of the work in a place separate from where the job is objectively located.
[16] Here, the Court is satisfied that there were two places of work. The trips that gave rise to the claim for the expenses and their deductibility in each case was from one place of work, (the office in the home) to another place of work (the School Board office), which was located in Port Hastings. All of the expenses that they claimed were related to the use of their vehicles, for travelling, in the performance of their duties of their office as School Board members.
[17] Counsel also referred to Goldhar v. M.N.R., [1985] 1 C.T.C. 2187, 85 DTC 202, where Taylor J. allowed the taxpayer's claims on the basis that it was established that she worked out of her house, which was her "base of operations". The same can be said of the case at bar. The case of Hoedel v. R., 86 DTC 6536, a case decided by the Federal Court of Appeal also offers some consolation to the Appellants pleas. Counsel also referred to Sword v. M.N.R., [1990] 2 C.T.C. 2298, 90 DTC 1798, but this Court does not find that case particularly helpful.
[18] In McDonald v. R., [1998] 4 C.T.C. 2569, 98 DTC 2151, Judge Rip indicated that:
". . . an employee also may have only one fixed work location but is required to travel to other places where the employer carries on business or for a business purpose. If it is more efficient or cost effective to the employer for the employee to begin or complete such trips at the employee's home, then such travel ought not be characterized as personal."
That factual situation is reflected by the evidence given in the case at bar.
[19] The Court will allow the appeals in each case and refer the matters back to the Minister for reassessment and reconsideration based upon the Court's finding that these expenses are exempt from taxation under the provisions of subparagraph 6(1)(b)(vii.1) of the Act.
[20] On the matter of costs, counsel for the Appellants asked that there be separate Bills of Costs and counsel for the Respondent argued that there should only be one.
[21] All of these cases involved the same points of facts and law. The evidence of each Appellant varied but the central theme was the same. The research that was involved in preparing these cases and the other work involved in the preparation of the cases certainly was enlightened by the fact that the Appellants were members of the same School Board and the problem that existed was the same for each one. The cost of presenting all of the Appellants as witnesses will be dealt with in the Bill of Costs and there is no disadvantage to the Appellants there.
[22] The Court concludes that this is a proper case for allowing one Bill of Costs, to be taxed.
Signed at Ottawa, Canada, this 9th day of April 2003.
|
"T.E. Margeson" |
J.T.C.C.
|
CITATION: |
2003TCC160 |
|
COURT FILE NO.: |
2002-3267(IT)I; 2002-3269(IT)I 2002-3270(IT)I; 2002-3271(IT)I 2002-3272(IT)I; 2002-3273(IT)I |
|
STYLE OF CAUSE: |
Marie Campbell; David M. Austen; Hazel M. Kennedy; George J. Kehoe; Allan C. Armsworthy; May Jess MacDonald |
|
PLACE OF HEARING: |
Halifax, Nova Scotia |
|
DATE OF HEARING: |
February 26, 2003 |
|
|
|
|
REASONS FOR JUDGMENT BY: |
The Honourable T.E. Margeson |
|
DATE OF JUDGMENT: |
March 5, 2003 |
|
DATE OF REASONS FOR JUDGMENT: |
April 9, 2003 |
|
APPEARANCES: |
|
|
|
|
|
|
|
|
Counsel for the Appellant: |
Bruce S. Russell |
|
Counsel for the Respondent: |
Dominique Gallant |
|
COUNSEL OF RECORD: |
|
For the Appellant: |
|
Name: |
McInnes Cooper |
|
Firm: |
1601 Lower Water Street Halifax, Nova Scotia |
|
For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |