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Docket: 2004-763(IT)I |
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BETWEEN: |
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JOSEPH GERALD SULLIVAN, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
____________________________________________________________________
Appeal heard on June 1, 2004 at Kamloops, British Columbia
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Before: The Honourable Justice D.W. Beaubier |
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Appearances: |
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Agent for the Appellant: |
Michael Parker |
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Counsel for the Respondent: |
Shawna Cruz |
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JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 2001 and 2002 taxation years are allowed and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
The Appellant is awarded the sum of $100 on account of out-of-pocket disbursements incurred in prosecuting this appeal.
Signed at Calgary, Alberta, this 14th day of June 2004.
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"D.W. Beaubier" |
Beaubier, J.
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Citation: 2004TCC420 |
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Date: 20040614 |
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Docket: 2004-763(IT)I |
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BETWEEN: |
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JOSEPH GERALD SULLIVAN, |
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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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REASONS FOR JUDGMENT
Beaubier, J.
[1] This appeal pursuant to the Informal Procedure was heard at Kamloops, British Columbia, on June 1, 2004, respecting the Appellant's 2001 and 2002 taxation years. The purported appeals for the 1996 - 2000 years are quashed. The Appellant was the only witness.
[2] Paragraphs 2 to 13 inclusive of the Reply to the Notice of Appeal describes the particulars in dispute. They read:
2. In respect of the whole Notice of Appeal, he admits that the Appellant's daughter Amanda Sullivan ("Amanda") was diagnosed in 1996 with Type 1 Insulin Dependant Diabetes (the "Impairment").
3. He has no knowledge of and puts in issue all the other allegations of fact contained in the Notice of Appeal.
4. In filing his Returns of Income for the 2001 and 2002 taxation years, the Appellant did not claim the Disability Tax Credit (the "Credit") in respect of Amanda.
5. The Minister of National Revenue (the "Minister") initially assessed the Appellant for the 2001 and 2002 taxation years on March 14, 2002 and March 6, 2003, respectively, as filed.
6. On February 7, 2003, a T1 adjustment request was received from the Appellant requesting that the Credit be allowed in respect of Amanda for the 1996 taxation year to the present. The Appellant attached a Certificate completed by a medical doctor indicating that Amanda was markedly restricted in a basic activity of daily living, specifically eating, as she required parental supervision of diet and insulin dosing and that she has been markedly restricted since June, 1996.
7. The Minister did not reassess the Appellant to allow the Credit for any taxation year and advised the Appellant by way of letter dated July 9, 2003 that the Credit was not being allowed because the matter had been referred to medical advisors in Ottawa Headquarters and that there was no indication that Amanda was markedly restricted in a basic activity of daily living or that she met the eligibility criteria under life-sustaining therapy as defined in the Act. For purposes of the Credit, life-sustaining therapy does not include special programs of diet or medication such as insulin.
8. The Appellant filed a Notice of Objection for the 1996 to 2002 taxation years. The Minster advised the Appellant by way of a letter dated August 12,2003 that only the objection for the 2002 taxation year had been filed on time. An extension of time to file an objection for the 2001 taxation year was granted, however, the objections for the 1996 to 2000 taxation years were not made within one year of the time otherwise provided for filing a Notice of Objection and therefore no time extension could be granted for those years.
9. The Minister confirmed the assessments for 2001 and 2002 taxation years as pursuant to subsection 118.3(1) of the Income Tax Act ("Act") Amanda was not an individual who has a severe and prolonged mental or physical impairment, where the effects of the impairment are such that the individual's ability to perform a basic activity of daily living is markedly restricted or would be markedly restricted but for therapy that
(i) is essential to sustain a vital function of the individual,
(ii) is required to be administered at least three times each week for a total duration averaging not less than 14 hours per week, and
(iii) cannot reasonably be expected to be of significant benefit to persons who are not so impaired.
Therefore, the Appellant is not entitled to a Credit under subsection 118.3(2) of the Act.
10. In so confirming the assessments for the 2001 and 2002 taxation years, the Minister assumed the following facts:
a) Amanda's date of birth is August 21, 1994;
b) Amanda was diagnosed with the Impairment in June, 1996;
c) The Impairment does not cause Amanda to be markedly restricted in her basic activities of daily living; and
d) Amanda does not require life sustaining therapy for the Impairment..
B. ISSUES TO BE DECIDED
10. The issue is whether the Appellant is entitled to the Credit in respect of Amanda for the 2001 and 2002 taxation years.
C. STATUTORY PROVISIONS RELIED ON
11. He submits that since no Notices of Objection were filed in respect of the 1996 to 2000 taxation years within the time prescribed by section 165 of the Act and as required by subsection 169(1) of the Act, this Honourable Court lacks jurisdiction to consider this appeal as it relates to those years and the appeal as it relates to those years should be dismissed.
12. He relies on sections 118.3, 118.4, 165 and 169 of the Act, as amended for the 2001 and 2002 taxation years.
D. GROUNDS RELIED ON AND RELIEF SOUGHT
13. He submits that since Amanda was not markedly restricted in any of her activities of daily living, she is not entitled to the Credit in the 2001 and 2002 taxation years pursuant to subsection 118.3(1) and section 118.4 of the Act and therefore, the Appellant is not entitled to the Credit in respect of her in those years pursuant to subsection 118.3(2) of the Act.
[3] Assumptions 10 a) and b) were not refuted by the evidence.
[4] Exhibit R-1 is the physician's report form respecting Amanda. The following two particulars in it are important:
1.
§ Can your patient feed or dress himself or herself?
Answer no only if, all or almost all the time even with therapy, medication, or advice, your patient cannot feed or dress himself or herself, or he or she takes an inordinate amount of time to do so.................................................Feeding yes [ ] no [X] Dressing yes [X] no [ ]
...
2.
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Life-sustaining therapy (applies to 2000 and later years)
If your patient needs life-sustaining therapy to support a vital function (see page 1), he or she may qualify for the disability amount, even if the therapy has alleviated the condition. Your patient must specifically dedicate the time needed for this therapy - at least three times per week, to an average of at least 14 hours per week (do not include time needed for travel, medical appointments, or to recuperate after therapy).
Does your patient meet these conditions for life-sustaining therapy? yes [ ] no [X] |
The concept in 2 above is taken from paragraph 118.3(1)(a.1)(i). Subsection 118.3 (a.1) reads:
118.3 (1) Credit for mental or physical impairment - 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 or would be markedly restricted but for therapy that
(i) is essential to sustain a vital function of the individual,
(ii) is required to be administered at least three times each week for a total duration averaging not less than 14 hours a week, and ...
The word "therapy" is defined in The Concise Oxford Dictionary, 8th Edition, 1990, to mean:
1 The treatment of physical or mental disorders, other than by surgery, 2 a particular type of such treatment.
[5] The evidence given by Mr. Sullivan to the Court is completely credible. He contradicted the quotation in paragraph [4] 2. The reasons for this are two-fold:
1. The doctor had no personal knowledge of the time required.
2. The word "therapy" may be interpreted by the doctor as describing professional medical intervention. In fact, Amanda's parents provided "therapy" to Amanda much more than three times per week and fourteen hours per week. They tested her blood sugar six to eight times per day in 2001 and 2002. They also supervised all of her feeding during these years when she was six to eight years old. Snacks had to be monitored. If Amanda went to a birthday party, she had to sit there while the other children ate their food and then she brought her cake and candy home for her parents to check their carbohydrate levels before she could eat any of it. This applies to all snacks and treats and three meals per day, seven days per week in addition to the insulin tests and treatments. All of this is therapy in the Court's view, and required more than fourteen hours per week from each of Amanda and her parents. This is especially so respecting a six to eight year old who is going to school, to other children's homes, and who is therefore in and out of her home and yet, in Amanda's and most cases, does not yet understand or know how to monitor carbohydrate levels, or her blood sugar levels, or her insulin. Thus, the Court finds Exhibit R-1, to have an incorrect answer to this question. The answer should be "yes".
[6] Moreover "feeding" includes meals, snacks and treats. It includes all intake of food which, given Amanda's need upon receiving her food to wait at a table before imbibing food (and without including Amanda's time spent after a meal at another's home and taking her treats home) for her parents to monitor what she might eat at any time, required an inordinate amount of time to feed herself. From Mr. Sullivan's testimony, that inordinate amount of time occurred in both 2001 and 2002 for Amanda.
[7] The therapy described herein was life-sustaining for Amanda. Without it, she would have gone into a coma and died. Moreover the diabetes markedly restricted Amanda's activities in feeding herself.
[8] These findings apply to Amanda and, generally, to a child who is her age and, for the first time, beginning school and going to other children's homes. The therapeutic supervision and therapy for such a child with diabetes is constant and is life-supporting. It was so in Amanda's case.
[9] The appeal is allowed. This matter is referred to the Minister of National Revenue for reconsideration and reassessment accordingly. The Appellant is awarded the sum of $100 on account of out-of-pocket disbursements incurred in prosecuting this appeal.
Signed at Calgary, Alberta, this 14th day of June 2004.
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"D.W. Beaubier" |
Beaubier, J.
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CITATION: |
2004TCC420 |
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COURT FILE NO.: |
2004-763(IT)I |
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STYLE OF CAUSE: |
Joeseph Gerald Sullivan v. The Queen |
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PLACE OF HEARING: |
Kamloops, British Columbia |
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DATE OF HEARING: |
June 1, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable Justice Beaubier |
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DATE OF JUDGMENT: |
June 14, 2004 |
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APPEARANCES: |
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Agent for the Appellant: |
Michael Parker |
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Counsel for the Respondent: |
Shawna Cruz |
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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 |