Date: 20010308
Docket: 2000-1513-IT-I
BETWEEN:
ROBERT BARBER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered orally from the Bench at Toronto, Ontario, on Friday, February 2, 2001)
Margeson, J.T.C.C.
[1] The matter before the Court at this time for decision is that of Robert Barber and Her Majesty The Queen. The sole question for determination is whether or not the Appellant is entitled to the equivalent disability tax credit as a result of an alleged hearing impairment by his two children, for the years 1997 and 1998. He was originally given the tax credit for the two boys as a result of the impairment and then it was subsequently disallowed. The Appellant, according to his own evidence, has received the disability tax credit for himself.
[2] The relevant statutory provision is subsection 118.4(1) of the Income Tax Act (“Act”). All of the legislation for our consideration is contained in that paragraph.
[3] The Court agrees with counsel for the Respondent that it is a high threshold that the Appellant has to meet. It is not every disability that entitles a person to the disability tax credit. It is not every time that a person has difficulty in hearing that a person is entitled to the tax credit. The tax credit was not designed for that. The legislation provides that a person is entitled to a disability tax credit where the impairment is prolonged, where it has lasted or can reasonably be expected to last for a continuous period of at least twelve months. There is no doubt about that. The threshold is met here:
(b) an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living.
[4] The term "a basic activity of daily living" is defined. Hearing is under consideration here. Hearing affects a number of different activities of daily living, of course, but it is the hearing itself which is the most important one here.
[5] The Statute provides: "Hearing so as to understand, in a quiet setting, another person familiar with the individual."
[6] There were a number of situations which were addressed in the evidence from which the Court has to conclude as to whether or not these two boys could hear in a quiet setting so well that their basic activity of daily living was not affected all or substantially all of the time. Consequently the Court has to address its attention to those items.
[7] Dr. Margo Mountjoy was a medical doctor who testified. She was familiar with these two boys and she was familiar with their parents. She specializes in family practice. She is also qualified in sports medicine. She was the family doctor of the two boys as well as of their father and was familiar with the hearing problems of all three of them.
[8] She said that there was no improvement for the two boys as far as she was concerned with respect to their hearing. She sees them in her office in her examining room. She speaks to them in a normal voice. She must keep eye contact with them. She introduced Exhibit A-1 at Tab 2 of the Appellant's documents, the Disability Tax Credit Certificate. She was referred to certain questions in the questionnaire. Question 5 had to do with lip-reading, and it stated in the certificate that they both lip-read. That was an addendum that she put on the certificate. The certificate for James Barber states:
5. Hearing
Is your patient able to hear (without speech reading) so as to understand a spoken conversation in a quiet setting, using an aid if necessary? (Exclude language differences.)
[9] These words are not specifically set out in the Act; these words are in the certificate. We only have the words in the Act which I have read already. But she added "No", and she said "lip reads". Has the impairment lasted, or is it expected to last, for a continuous period of at least 12 months? Yes. Is the impairment severe enough to restrict the basic activities of daily living identified above all or almost all the time even with therapy and the use of appropriate aids or medication? She answered yes.
[10] There is also a certificate at Tab 3 for Graham Barber completed by the same doctor, and on page 1 it asks: Was your patient markedly restricted? Date your patient became markedly restricted. She gave a date. She indicated that the patient would be markedly restricted permanently. Indicate how your patient is markedly restricted; hearing.
[11] On the back of the certificate: Is your patient able to hear -- the same words I read before in paragraph 5, and she says no. Has the impairment lasted for twelve months? Yes. Is the impairment severe enough to restrict the basic activities of daily living all or almost all the time? Yes."
[12] Certainly the doctor's certificate seems to cover the situation as far as she is concerned, but we are not limited to that in this case. We have the evidence of the doctor herself on the stand. When that question was put to her she testified that it was her position, the same as it was in the certificate, that these boys' ability to hear was markedly restricted within the context of the section of the Act which I read. It is up to the Court to decide whether that is correct or not, but at least the sections were read to her and it was her position by completing the certificate that she believed that they were markedly restricted under the Act and they are entitled to the disability tax credit.
[13] She said there was a severe hearing loss for both boys. She described it as profound and persistent. She said they can hear under normal conditions with complete eye contact. That is, if she had complete eye contact with them they can hear normally, or hear normal conversation. Their hearing aids merely amplify the sound waves. They do not improve the hearing.
[14] In cross-examination she was referred to the audiological reports and she said that they had a 92 and 96 percent ability to understand. One boy had 92, one had 96. She said that they can carry on a conversation in a normal setting with the restrictions that she put on them before, but she said if they do not use the lip-reading it would be decreased. They appear to understand my questions, she said.
[15] In redirect, she said that the audiograms are performed in a soundproof box.
[16] Robert Barber testified. He is a labourer. He also has a hearing disability. He said that he never had any problems with the disability tax credit until these occasions arose. He was asked what he did after he was refused the disability tax credit or after he was reassessed and he said that he contacted the doctors and went about doing what they had asked for and completed form T2201. He referred to the two certificates which I have already mentioned, identified them and he said that he agreed with what the doctor had to say in testimony here today.
[17] He was referred to Tab 4 of Exhibit A-1. This was a letter from Revenue Canada and he said that Revenue Canada said that he needed new reports. Then he was shown another document and he said they did not say anything about disallowing the credit. But in Tab 10 they changed their position. In Tab 8, he said that he and his wife wrote it.
[18] They incurred a significant financial loss in moving to a new location to accommodate the needs of the boys. They wanted to be where they could make use of facilities to enable the boys to be educated. They each wear two hearing aids and they have a special FM system when they are in school. They also must have visual contact.
[19] He did some research to see what was required by way of evidence for him to satisfy the Court that he was entitled to the tax credit. He tried to find out what was meant by the term "quiet setting". Then he directed himself to specific examples of the difficulties that the boys had in their daily life. He said they miss what is going on when they are driving in a car. Apparently one sits in the back, one sits in the front and they have trouble communicating with each other. When the car window is open that creates a further difficulty. In other words, I take him to have meant that matters became more difficult.
[20] There is further difficulty when there are other noises around, such as opening the window. His evidence was that it becomes very difficult. Both boys use two hearing aids in the school and they use the FM sound system. He said that it was satisfactory when you are one-on-one, the difficulty is not so great, but that's all. He referred to the past when they had a sound system where one boy was connected to the husband and one to his wife so that they could communicate with the boys when they were out of their sight. Now once they are out of sight, their hearing is gone.
They do not have the FM system and they have not used this system of communication for some years because the boys do not like others to see them using it.
[21] In cross-examination, he said that they have a similar hearing problem to himself. They have not improved. They want to be independent. As far as telephone conversations are concerned, they can have a conversation on the telephone but they have a special telephone in their house for the boys to be able to use it. They could not talk on a regular telephone. They don't play in the streets. They had signs made and put up in the neighbourhood warning of the presence of children with a hearing disability.
[22] They are able to ride their bikes if they are with their parents together. Sometimes they go on their own now, but they only go in their local neighbourhood because they are familiar with it. They go around the block.
[23] They have answered the telephone before and they watch TV. Sometimes they understand on their own. They listen to the radio. They have difficulty. They can't understand it. For instance, when they are watching TV, they might have to ask what is the score. They can't hear the words themselves. As far as he was concerned it was just another form of noise to them.
[24] Patricia Barber testified that she was an engineering secretary. She is the wife of Mr. Barber. The two boys are her children. She spends more time with them than her husband. They have a hard time hearing and understanding even in a quiet setting. There is a lot of repeating and is very frustrating. She can't call from one room to the other. If the boys are upstairs in one room, for instance and she wants to tell them to turn the TV off or go to bed she has to go in and face them and speak to them before they understand.
[25] There may be difficulty at the dining room table. One boy might be talking about asking permission to do something and the other boy will misunderstand him. Friction develops because one thinks that the other was receiving a form of privilege. She has to take the time to explain to them that what one boy thought the other said was not what he said at all.
[26] On a regular telephone it is almost impossible, she said, for them to hear. She can't make any noise at all. For instance, if they are on the telephone, she has to stop doing anything in the house. She has to stop rattling pans, she has to stop washing dishes and possibly stop preparing meals. Otherwise they can't hear.
[27] In the car when one boy is in the back and one is in the front, the one in the back cannot hear what is going on in the front. She indicated that they play ball, apparently, but it's a case where even when they get on base she has to go and tell them to move from first base to second base. Basically she has to tell them what to do. She must get up closer to them and pass the information on to them.
[28] In cross-examination, she said that Graham also has an attention deficit disorder but his condition with respect to the hearing has not deteriorated since that was diagnosed. There are misunderstandings between the two boys when they are talking to one another.
[29] Graham Barber was sworn. This was one of the boys. He is 9 years of age. He is in grade 3. He wears two hearing aids all of the time except when he is in the pool swimming or when he is in bed. He was asked a number of questions. He was asked who was his favourite sports team and he answered hockey He did not understand that one. On that occasion counsel turned her back to him when she was asking these questions. He was asked if he brushed his teeth each night and he answered that all right. He was asked what his favourite drink was before going to bed and he said orange juice. He was asked what age a person could drive a car at. It was 18. He was able to answer that. He missed one of those and that was the conversation in the courtroom. Of course, there were no other distractions in the courtroom at that time that the Court could detect.
[30] In cross-examination he said that he was excited about being here. That was one of the questions asked him by counsel for Respondent. He said that he liked TV and radio. His favourite game was playing army and he pretends to be a soldier. I noted that he seemed to answer those questions all right.
[31] James Barber was entitled to be sworn as the other boy. He understood the nature of an oath, and there was no issue taken by counsel in that regard. He was sworn. He said that he was ten years of age, he lives in the Kitchener area. He is in grade 4. Counsel turned her back to him. He said initially that he could not hear. Then he said that he played catch. Then he was asked another question. He could not hear that. He was asked if he went fishing with his father. He said he could not hear. Then he was asked if he spoke to his grandparents today and he said no. He missed three of those five questions as far as the Court could detect. He is certainly not as good in that regard as the other boy was when he testified.
[32] The Appellant tendered and called no further evidence. The Respondent called no evidence.
Argument on behalf of the Appellant
[33] In argument, counsel for the Appellant said there are three tests: whether there is a severe and prolonged disability; whether it is markedly restricted. She said these two items are not in dispute. They are in the certificate. There must be a certificate, and that is here. The doctor said that it is severe and prolonged. He said that as far as she was concerned she believed that they were markedly restricted under the Act. They could not understand in a quiet setting, as that term should be defined by the Court.
[34] She referred to a number of cases and she said that the cases make it clear that you should not consider lip-reading when you are considering this issue, nor should you consider bodily reactions and body actions.
[35] She reiterated that when you consider the facts in those cases and take into account the situation that was described here today, the courtroom is an extremely quiet setting; a doctor's office is an extremely quiet setting. There is no noise, there are no other voices. It is an artificial setting insofar as comparing it to what one has to encounter in daily life.
[36] She also said that another requirement is the child has to be able to hear as to understand. It’s not just enough that they hear a noise; they must understand. Thirdly, the other requirement is a quiet setting. A quiet setting is not defined in the Act. Her position was that in interpreting that term we must have more regard to subjective situations. With respect to the decibel reading there has been no real interpretation as to what is required in that regard. The audiology tests that were given have not been explained by a real audiologist and are not that helpful. In any event, the tests were taken in a soundproof room. That, the courtroom and the doctor's office are not normal situations where we should compose the test. That is not what the legislature had in mind when it was trying to indicate what a quiet setting was.
[37] Her position was that the more realistic situations were those described by the mother and the father here today. Around the kitchen table; driving in a car sometimes with the window down; out bicycling; speaking to the children at night before they are going to bed when you can't see the child and it is dark. In all of those situations her position was that these children had trouble communicating with their parents and understanding what was being said to them.
[38] She indicated that a quiet setting is different for different people. These are boys. The evidence is that they would have a hard time in any one of these settings. The reason for the credit is to help the taxpayer meet some of the extraordinary costs that must be incurred when people have disabilities and that at the end of the day the legislature could not have been expected to give this disability tax credit or make it available only where a very high threshold was met or otherwise people who have large expenses like these people, would not be able to qualify for the benefit.
[39] Lip-reading is not a device that the Court can consider in deciding whether the disability qualifies. "Living" means daily living as a normal person would be expected to go through their daily living. The appeal should be allowed.
Argument on behalf of the Respondent
[40] The Respondent says, and the Court agrees, that these are difficult questions. It is always a difficult question as to whether or not a disability is one which qualifies under the Act. It is not an easy test. But the test is not absolute while at the same time, it is not everybody who has a disability who is entitled to claim the credit.
[41] Subsection 118.4(1) of the Act talks about the requirements. It has to be in a quiet setting. The disability has to be markedly restricted and the conversation must be with another person familiar with the individual. That is what the Court must consider.
[42] Her position was that the doctor's office is a quiet setting. The doctor's office is the type of setting that the Act is talking about. In the doctor's setting they did not have any difficulty. That is her position.
[43] When one considers the audiological reports, one child had 92 percent capacity to understand the words and the other had 96. Her position was, presumably, that this is quite a high amount of understanding. The children's evidence is the best evidence according to her. They testified here today and basically they did not show too much difficulty.
[44] She referred to a number of cases, Cotteral v. Canada. 1995 CarswellNat 450, [1995] 2 C.T.C. 2093D #2. In that case where the disability was disallowed even though the person had a hearing problem, things had to be repeated to them. They had to have a special telephone. Apparently there was lip-reading. She referred to page 14 at paragraph 18. She said that that case is similar to the present case.
[45] The Court notes that in that particular case, Dr. Sutherland gave testimony on behalf of the Respondent and explained what the decibels meant and the importance of speech discrimination in understanding. She said that if speech discrimination is gone, amplification does not help much. We do not have that evidence in this particular case. We only have the evidence of the family doctor who was not an audiologist. I can only presume that Dr. Sutherland's evidence in that case had quite an effect upon Judge Rip.
[46] The case of Lamarre v. R., 1996 CarswellNat 2756, [1998] 2 C.T.C. 2708 and Cooper v. R., 1996 CarswellNat 1525, [1996] 3 C.T.C. 2189D #2 were referred to. In Cooper, supra, where the individual could not understand cross-examination, Judge Christie was not satisfied that the person was entitled to a disability tax credit. That situation might very well have been different than the one here today but there certainly were some problems in the examination here today. The Court takes that into account. Judge Christie did not think that there was any problem with the person speaking in Court in that case.
[47] In S. Adams v. Canada, 1994 CarswellNat 1284, [1995] 1 C.T.C. 2801D #1, the individual had a lot of trouble hearing when other people were around, amongst other things but he was not successful in the application in that particular case. Counsel's position is that the appeal here should be dismissed.
[48] In rebuttal, counsel for the Appellant said the doctor's evidence was that if they looked at her they could understand, but they had to look at her. They had to have absolute eye contact. She reiterated what she thought the test should be and her position was that the appeal should be allowed.
Analysis and Decision
[49] Every case of this nature, where one is seeking a disability tax credit, is a difficult case by it's very nature. Everyone who makes an application under this section has a disability. The section does not permit anybody who has any kind of a disability to gain the credit. Neither, though, is the section absolute. It does not mean that only those with the most severe or prolonged or absolute conditions are entitled to the disability. If it required absolute proof, then of course nobody or very few people might ever be able to bring in the evidence that they require. But the section does require that the Appellant establish on a balance of probabilities that the disability which is complained of meets the tests as set out in the Act.
[50] Here, the Court is satisfied that in order for the Appellant to be successful he must satisfy the Court that the two boys had a disability. There is no doubt about that. The disability was hearing. He must establish that the disability was permanent. The Court is satisfied that it was. There must be a certificate. There was a certificate. The certificate says that the disability was permanent, it says that it was severe, that it was prolonged and that it prevented the Appellant from performing one of the functions of daily living in accordance with the requirements of the Act.
[51] The Act says that the disability must be of such a nature as to prevent the person from performing one of the functions of daily living all or almost all of the time or require an inordinate amount of time for the person to perform that function.
[52] Having said that, the Act gives no further definition of what this disability is and it is left up to the courts to decide on the basis of the facts in each case. Each case must depend upon its own facts. The other cases are helpful, but in every other case at least some of the facts are different. So the Court has to look at the law, look at the section, look at the evidence given before it.
Subparagraph 118.4(1)(iv) says:
Hearing so as to understand, in a quiet setting, another person familiar with the individual.
[53] The Court is required to make a determination of what a quiet setting is. The Court is satisfied that a quiet setting does not mean a doctor's office. The Court is satisfied that a quiet setting does not mean a sound booth in an audiologist's office. The Court is satisfied that the quiet setting must be the normal setting that a person encounters during the day when they are performing the functions of daily living. That means in a room talking with people, that means in a house when their parents are there, when there may be other activities going on, when they are preparing dinner or perhaps where the phone is ringing or when other conversations are going on. It does not mean that a person has to be able to hear when there is a substantial amount of noise or an extraordinary amount of noise. It is in between, but surely it must refer to a normal situation in which a normal person would find themselves during the context of conducting their life during a normal day.
[54] That involves all the situations to which I have referred above. It means going out in the car, sometimes when the windows are rolled down, it means in a doctor's office sometimes, talking, giving instructions, receiving responses from the doctor. It means lying down with the father or the mother at night talking when going to bed. It means talking on the telephone. It means listening to the telephone ring. It includes all of the situations described here today.
[55] As far as the courtroom is concerned, the Court is satisfied that that lies somewhere in between. I do not think the courtroom is exactly what the legislators had in mind. The courtroom is certainly a more quiet setting than that contemplated by the Act, but the courtroom to a certain extent is artificial. The Court is satisfied that there would be more noise and background noise, there would be more goings on, such as wind or cars outside or other people talking, in a normal situation which one runs into every day during the course of their daily living which you would not find in a courtroom.
[56] In the courtroom here today it was very quiet. There were no distractions whatsoever. The only conversations that were going on were the questions asked by counsel, possibly by the judge, by the swearing in. Other than that, we have a very quiet setting. Judge Watson, in Lamarre, supra, found that the Appellant was able to go about his daily activities with the use of his two hearing aids. He was not satisfied that the person was entitled to a disability tax credit.
[57] That was not the situation shown the Court here today. This Court has a situation where one of the persons missed at least one question in this very quiet setting and where one of the boys missed more than 50 percent of the questions.
[58] This Court has a situation where the audiology report says that one boy only hears 96 percent or understands 96 percent of the communications and the other understands 94 percent of the questions. Unfortunately we do not have an audiologist to tell us exactly what that means, but it would seem to this Court that if you do not understand 6 percent of the questions or even 4 percent of the questions during your daily living that is a substantial shortcoming. It could be quite significant in carrying on a conversation. Even though those percentages would seem to be high, without more evidence as to exactly what they mean, this Court concludes that they represent a significant disability in the understanding of those two boys.
[59] The Court's position is buttressed by the questions which they were asked in Court, which it has already referred to, where one boy missed at least half or more than half of the questions when the counsel's back was turned. The other one missed at least one. The courtroom setting is not the normal setting which the Act is referring to.
[60] It is quite obvious that the boys lip-read and lip-reading plays an essential part in their comprehension or understanding of what people are saying to them. The Court is satisfied that the legislation does not contemplate that people should be able to lip-read. When they talk about the use of appropriate devices and medication, the Court is satisfied they are not talking about lip-reading. The Court has to make its decision free of lip-reading.
[61] In this case, the Court is satisfied that the lip-reading of these boys was very important in whether or not they understand what was being asked of them.
[62] The Court places a great deal of weight upon the evidence of the doctor who testified and the evidence of the mother and father who were able to relate in detail specific situations in the day-to-day living of these boys which indicate to the Court the extent of the problem.
[63] It was not clear whether the boys had their hearing aids on when talking to their father just prior to bedtime and it was not asked. The Court did note, though, that one of the boys said that he only takes the hearing aids off when he goes in the water and when he goes to bed at night. Now, this may have been before he was retiring for the night, the Court is not sure. The Court will presume that he still had his hearing aid on and that because the father was not looking at him he was not able to understand.
[64] The Court takes into account all of the factors considered here, takes into account the cases, where some were successful and some were not, the Court has to look at them and interpret them in light of the facts given in this particular case. These cases are factually driven. They are very subjective. When the Court considers all that it has to, the Court is satisfied that the Appellant has met the burden upon him of establishing that during the years in question the boys suffered from a severe and prolonged disability, hearing, which made them incapable of performing a function of daily living, or at least took an inordinate amount of time for them to enjoy that function, all or almost all of the time. The Court takes into account the specific terms in the section: hearing so as to understand in a quiet setting another person familiar with the individual. When the Court looks at all of the evidence in the most reasonable light that it can, it is satisfied that the Appellant has met the burden in this case.
[65] The Court has looked at some of the documents in the file, especially from the Appeals Division in Prince Edward Island, and it is sure that the appeals officer must have placed quite a bit of weight upon the audiological report and the fact that one of the boys had a 94 percent capacity to understand words and the other had a 96 percent capacity of understanding words. The disability tax credit had been given in other years and the evidence indicated that the department told them that they had to put in new reports. They did so and this audiological report must have had considerable import in what they decided.
[66] In any event, in spite of that, this Court is satisfied that the Appellant has met the burden. The appeal will be allowed and the matter referred back to the Minister of National Revenue for reassessment and reconsideration based upon the Court's finding that the Appellant is entitled to the disability tax credit for his two boys in the years in question.
[67] The Appellant will be entitled to his costs to be taxed.
Signed at Ottawa, Canada, this 8th day of March 2001
"T.E. Margeson"
J.T.C.C.