T-2139-76
The Queen (Plaintiff)
v.
Thomas Healy (Defendant)
Trial Division, Thurlow A.C.J.—Toronto, March
21; Ottawa, April 10, 1978.
Income tax — Income calculation — Deductions — Cost of
employee's meals held to be not excluded from s. 8(1)(h)
travelling expenses deduction by restriction in s. 8(4) —
Employee regularly reporting to work at three of employer's
establishments — One establishment located in a different
municipality — Whether or not employee entitled to deduct
cost of meals claimed as part of expenses for travelling in
course of employment — Income Tax Act, S.C. 1970-71-72, c.
63, s. 8(1)(h),(4) — Interpretation Act, R.S.C. 1970, c. 1-23, ss.
3(1), 26(7).
Defendant, who was employed by a Toronto-based organiza
tion with several places of business, regularly reported for work
at either the Greenwood or Woodbine racetracks in Toronto, or
at one located in Fort Erie. Defendant's deductions for travel
ling to Fort Erie were deductible pursuant to section 8(1)(h);
the Tax Review Board held that the cost of meals were not
subject to the restrictions imposed by section 8(4) and were to
be included as part of the deductible travelling expenses. The
issue is whether the defendant is entitled to deduct the cost of
meals claimed as part of his expenses for travelling in the
course of his employment.
Held, the appeal is allowed. To give the word "ordinary" as
found in section 8(4) its meaning, it is necessary to identify the
employer's establishment to which the employee "as a matter of
regular occurrence", "usually" or "normally" reported for
work. It is also necessary to ascertain the municipality in which
the establishment is located. This employee normally and as a
matter of regular occurrence reported for work at three of the
employer's establishments. There is no valid reason for distin
guishing any one of the three from the others, and it is
impossible to conclude that any one alone was or any two
together were the establishment to which the defendant ordi
narily reported for work. Since words in the singular include a
plural meaning in the absence of contrary intention, the words
"municipality" and "establishment" include the plural. All the
establishments therefore fall within the meaning of "establish-
ment to which he ordinarily reported for work" in section 8(4).
The municipality in which the Fort Erie track is located and
that or those in which the Woodbine and Greenwood tracks are
located fall, as well, within the meaning of "municipality" in
the subsection. Section 8(4) accordingly bars the defendant's
right to the deduction in question.
INCOME tax appeal.
COUNSEL:
W. Lefebvre for plaintiff.
J. L. McDougall for defendant.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Fraser & Beatty, Toronto, for defendant.
The following are the reasons for judgment
rendered in English by
THURLOW A.C.J.: This is an appeal from a
decision of the Tax Review Board which allowed
the defendant's appeal from an assessment of
income tax for the year 1973. The issue is whether
the defendant is entitled, in computing his income,
to deduct an amount of $504 for the cost of meals
claimed as part of his expenses for travelling in the
course of his employment.
Under paragraph 8(1)(h) of the Income Tax
Act'
8. (1) ...
(h) where the taxpayer, in the year,
(i) was ordinarily required to carry on the duties of his
employment away from his employer's place of business or
in different places,
he may, subject to the other limitations of the
paragraph, deduct
... amounts expended by him in the year for travelling in the
course of his employment;
It is under this paragraph that the defendant
claims the deduction.
But under subsection 8(4)
S. ...
(4) An amount expended in respect of a meal consumed by
an officer or employee shall not be included in computing the
amount of a deduction under paragraph (1)(J) or (h) unless the
meal was consumed during a period while he was required by
his duties to be away, for a period of not less than twelve hours,
from the municipality where the employer's establishment to
which he ordinarily reported for work was located and away
from the metropolitan area, if there is one, where it was
located.
The defendant resides in Toronto. For some 25
years, including 1973, he was employed by the
Ontario Jockey Club which has its head office in
1 S.C. 1970-71-72, c. 63.
Toronto and operates six racetracks including the
Greenwood and Woodbine tracks in Toronto and a
racetrack at Fort Erie about 100 miles from
Toronto. In 1973 the defendant was employed
during the thoroughbred racing season from
March 21 to December 1 as a money room division
head and at times as a money room captain, all in
connection with the pari mutuel operations of the
Club. He was assigned to work at differing times
during the year at the Greenwood, Woodbine and
Fort Erie racetracks. He worked at Fort Erie at
two race meetings during the year, the first from
April 15 to May 13 and the second from July 18 to
September 1. While at Fort Erie he lived at a
motel. He received no allowance or reimbursement
from his employer in respect of his transportation
expenses to or from Fort Erie or for his expenses
while there. His claim for a deduction under para
graph 8(1)(h) in respect of his transportation and
motel expenses was not challenged but the amount
claimed for expenses for meals totalling $504 was
disallowed under subsection 8(4). That his
expenses for meals amounted to $504 is not in
dispute.
The defendant was a member of a union of
employees of the Club. At the beginning of the
thoroughbred racing season he would find out
where he was to work first from an assignment list
which would be posted at the union office. Assign
ment lists for the subsequent race meetings would
be posted at the racetrack where a race meeting
was in progress. At the beginning of a season, the
defendant would not necessarily expect to be work
ing outside Toronto during the year but it was a
definite possibility that he would be assigned to go
to Fort Erie. On one occasion prior to 1973, he had
volunteered to go there when the Club was short-
handed and he was sent there each year afterwards
except one year when his father was ill and he did
not wish to go. In 1973 his first assignment was at
the Greenwood track and most of his employment
during the racing season was at the Greenwood
and Woodbine tracks.
The defendant's position was that, as he was
ordinarily required to carry on the duties of his
employment in different places, the amount here in
question was deductible as part of his travelling
expenses under paragraph 8(1)(h) and the deduc-
tion was not prohibited by subsection 8(4) as the
racetrack at Fort Erie was not the establishment of
his employer "to which he ordinarily reported for
work" within the meaning of the subsection.
The meanings given in The Shorter Oxford
English Dictionary for the word "ordinarily" are:
1. In comformity with rule; as a matter of regular occur
rence .... 2. In most cases; usually, commonly .... 3. To the
usual extent .... 4. As is normal or usual ...
In the French language version of the Act, the
corresponding expression used in paragraph
8(1)(h) is "d'une manière habituelle" and in sub
section 8(4) the word is "habituellement". The
meanings of "habituellement" as given in diction-
naire Quillet de la langue française are: "D'habi-
tude, par habitude; d'ordinaire". The contrary is
given as: "Rarement, exceptionnellement". The
meaning given for "habituel, elle" is: "Passé â
l'état d'habitude; coutumier". It is contrasted
with: "Rare, exceptionnel, inaccoutumé, désuet".
"NORMAL" is suggested as a synonym.
In paragraph 8(1)(h) the word "ordinarily"
modifies "required to carry on the duties of his
employment [etc.]", and it appears to me to be
equivalent to "normally" as opposed to "rarely" or
"exceptionally". The meaning "in most cases"
does not fit. That of "as a matter of regular
occurrence" does.
In the view I have of the facts, it was a matter of
regular occurrence, normal and not exceptional for
the defendant to carry out his duties during the
racing season as required by his employer at at
least two, if not three, different places, that is to
say, at Toronto and at Fort Erie or at the Green-
wood, Woodbine and Fort Erie racétracks. I con
clude, therefore, that the defendant's situation fell
within the meaning of paragraph 8(1)(h) and that
he was entitled to a deduction in respect of his
expenses of travelling in the course of his employ
ment. Moreover such expenses would, I think,
ordinarily include, but for the effect of subsection
8(4), the cost of his meals while at Fort Erie in the
course of his duties.
In subsection 8(4), the word "ordinarily" is part
of the phrase "where the employer's establishment
to which he ordinarily reported for work was locat
ed". In this context it modifies the expression
"reported for work" and has the effect of narrow
ing what the phrase would include if the word were
not there. The expression "reported for work"
itself refers, I think, to the daily attendance by an
employee for work. To give the word "ordinarily"
its meaning, it appears to me to be necessary to
conceive of and identify the establishment of the
employer to which the employee "as a matter of
regular occurrence", "usually" or "normally"
reported for work.
When this has been done, the wording of the
subsection makes it necessary to go a step further
and ascertain the municipality in which that estab
lishment is located.
In the present case there were, in my view, not
one but three establishments of the Jockey Club to
which the defendant in the course of the racing
season usually, normally and as a matter of regu
lar occurrence reported for work, that is to say, the
Woodbine, Greenwood and Fort Erie racetracks,
depending, in each case, on the race meetings
being held and the track to which the defendant
was assigned. On the facts I am unable to see any
valid basis for distinguishing, for present purposes,
any one of the three tracks from the others and I
am unable to reach the conclusion that any one of
them alone was or that any two of them together
were the establishment where the defendant ordi
narily reported for work to the exclusion of the
other or others.
Under subsections 3(1) and 26(7) of the Inter
pretation Act e , unless a contrary intention
appears, words in the singular include the plural
and words in the plural include the singular. In
subsection 8(4) of the Income Tax Act, I do not
think a contrary intention appears and so it is
necessary, in my opinion, in applying it to the
present situation to read both the word "munici-
pality" and the word "establishment" as including
the plural.
The Fort Erie, Woodbine and Greenwood race
tracks were all establishments of the Jockey Club
to which the defendant ordinarily reported for
work. All three, therefore, fall within the meaning
of "establishment to which he ordinarily reported
2 R.S.C. 1970, c. I-23.
for work" in subsection 8(4). It follows, in my
opinion, that the municipality in which the Fort
Erie track is located and that or those in which the
Woodbine and Greenwood tracks are located fall,
as well, within the meaning of "municipality" in
the subsection. Subsection 8(4) accordingly applies
to bar the defendant's right to the deduction in
question.
The appeal will be allowed and the assessment
will be restored. Under subsection 178(2) of the
Income Tax Act, the Minister of National Reve
nue will be ordered to pay all reasonable and
proper costs of the defendant in connection with
the appeal.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.