Date: 20010330
Docket: 2000-831-IT-I
BETWEEN:
SHEILA ANANTHAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
--- Held before His Honour Judge Teskey of The Tax Court of Canada, in Courtroom Number 1, 9th Floor, Merrill Lynch Canada Tower, 200 King Street West, Toronto, Ontario, on Friday, the 30th day of March, 2001.
Reasons for Judgment
(Delivered orally from the bench at Toronto, Ontario)
JUDGE TESKEY, (Orally):
The Appellant appeals her reassessment of income tax for the year 1996 and in her Notice of Appeal she elected the Informal Procedure. This matter first came before me in January of this year and, unfortunately, the Appellant did not have all her documents and after a partial trial it was adjourned to today.
Today she has brought forth her documents and her bills and has given testimony. The documents speak for themselves. She is involved in a lawsuit against her former employer. A review of the court proceedings show that she is suing for wages.
The lawsuit was commenced in 1989. There have been several statements of defence. When I say, "several," I mean the statement of defence has had several amendments thereto. I will not and cannot speculate on whether the Appellant will be successful. That will be up to a Superior Court Judge in Ontario on hearing all the evidence of all the parties. The Appellant alleges the employer owes her money. The employer is alleging that she was not competent and has counterclaimed. The employer also alleges that the bonus is not the amount that the Appellant alleges, but that is what a Superior Court Judge of Ontario will have on his or her plate at the proper time.
So I am satisfied that here in the year 2001, the Appellant is suing a former employer to establish a right to salary. Now, whether it is heavy-handed or not, it appears that the employer group are trying to browbeat a young woman into the ground with counterclaims and prolonging a lawsuit. What the come out will be, who knows. And if that is actually what it is all about, the Superior Court Judge may quite readily allow solicitor and client costs. I do not know whether it is heavy-handed or not, so I will not speculate.
Section 8(1) allows a deduction for legal expenses, and it reads quite clearly:
"Amounts paid by the taxpayer in the year as or on account of legal expenses incurred by the taxpayer to collect or establish a right to salary or wages owed to the taxpayer by the employer or former employer."
These expenses were spent in the year in front of me, and for the Minister to take the position that she has to wait until who knows when, and whether she is successful or not, it does not matter, she will get it then, I think is totally wrong. I think the interpretation bulletin is wrong. The Minister also says, "Well, do not give her anything to defend herself on the counterclaim." Well, that is so inextricably tied up with her right to the wages it would be a travesty of justice not to give her her legal fees. She is suing for wages and has to, at the same time, defend herself in order to get those wages, and I have no intention of trying to cut the bill down by one cent.
The appeal is allowed with costs and the assessment is referred back to the Minister for reconsideration and reassessment that in 1996 the Appellant is entitled to deduct from income legal expenses of $4,742.09.
MS. ANANTHAN: Thank you, Your Honour.
MS. WHITTAKER: Thank you, Your Honour.
---Whereupon the reasons were concluded.
I HEREBY CERTIFY THE FOREGOING
to be a true and accurate
transcription of my shorthand notes
to the best of my skill and ability.
Aziza Othman, C.S.R.
Computer-Aided Transcription