Date: 19980206
Docket: A-293-97
CORAM: STONE, J.A.
LINDEN, J.A.
MCDONALD, J.A.
BETWEEN:
J. ROBERT VERDUN
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Toronto, Ontario, Thursday February 5, 1998
Judgment delivered from the Bench at Toronto, Ontario, Thursday February 5, 1998
REASONS FOR JUDGMENT BY: LINDEN, J.A.
CONCURRED BY: STONE, J.A.
MCDONALD, J.A.
Date: 19980206
Docket: A-293-97
CORAM: STONE J.A.
LINDEN J.A.
MCDONALD J.A.
BETWEEN:
J. ROBERT VERDUN
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
(Delivered from the Bench at Toronto, Ontario
on Thursday February 5, 1998)
LINDEN, J.A.:
[1] This application for judicial review challenges a decision of the Tax Court, which found in favour of the applicant on several issues, but against him on the matter of certain meal allowances of $1440 per year for three years. These allowances were calculated in advance, but based on past experience, at $7 per meal, four days per week. The Tax Court Judge treated these amounts as benefits under paragraph 6(1)(a) of the Income Tax Act. We agree with the result arrived at by the Tax Court Judge but would prefer to base our decision on paragraph 6(1)(b), for this payment to the applicant is more properly described as an allowance.
[2] An allowance is usually a monetary payment to cover personal expenses, whereas a benefit is normally, but not exclusively, a non-monetary benefit. In this case, the money received by the applicant was meant to cover the cost of his having meals when he worked at his Elmira office, some 20 miles away from his home in Wellesley, four evenings per week. While the applicant argues that the amounts paid were reasonable, the Income Tax Act, as it now stands, does not permit him to remain untaxed on these receipts, no matter how reasonable they may seem to him.
[3] Following the principles set out by this Court in Attorney General of Canada v. MacDonald [1994] F.C.J. No. 378: (1) these amounts were an arbitrary or fixed amount, that was determined in advance (even though based on an estimate of the potential cost); (2) they were paid to cover personal expenses in lieu of reimbursement; and (3) there was no obligation to account for them. As such, the payments were an allowance and taxable as income, because the applicant had the discretion, if he chose, to use the money as he saw fit without the requirement of submitting receipts. Even when these amounts are not used for any improper purpose, and even when they are reasonable estimations of the costs, our law treats them as additional renumeration, not as reimbursement of expenses, which require detailed receipts being submitted for reimbursement. This is felt to be necessary in order to ensure that allowable, reimbursed, personal expenses are accurately recorded and that the system is fair for all Canadians, even though extra accounting costs may be incurred.
[4] In our view there is no merit to the natural justice and constitutional arguments advanced by the applicant.
[5] As for the costs, the applicant was treated generously by the Tax Court Judge, who technically may not even have been empowered to award the $1000 he did, but the Crown has wisely not appealed that order. We will, therefore, not interfere with the order as to costs.
[6] Despite this conclusion, this decision should not be read as impugning the honesty of the applicant; this case was based exclusively on a legitimate difference of opinion between Revenue Canada and the applicant.
[7] The application will be dismissed.
"A.M. Linden"
J.A.
FEDERAL COURT OF CANADA
Date: 19980206
Docket: A-293-97
BETWEEN:
J. ROBERT VERDUN
Applicant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-293-97
STYLE OF CAUSE: J. ROBERT VERDUN
- and -
HER MAJESTY THE QUEEN
DATE OF HEARING: FEBRUARY 5, 1998
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
| BY: LINDEN, J.A. |
DATED: February 6, 1998
Delivered from the Bench at Toronto, Ontario
on Thursday February 5, 1998
APPEARANCES: Mr. J. Robert Verdun
For the Applicant
Ms. Johanne D'Auray
For the Respondent
| SOLICITORS OF RECORD: Mr. J. Robert Verdun |
15 King Street
Elmira, Ontario
N3B 2R1
For the Applicant
George Thomson
Deputy Attorney General
of Canada
For the Respondent