T-2003-76
Alger F. Walls (Respondent) (Plaintiff)
v.
The Queen (Applicant) (Defendant)
Trial Division, Gibson J.—Windsor, June 24;
Ottawa, July 16, 1976.
Income tax—Plaintiff employed in goods transport required
to travel away from place of business in Windsor—Seeking to
deduct disbursements for meals consumed in Detroit, under
section 11(7) of Income Tax Act—Defendant disallowing—
Whether Detroit and suburbs part of metropolitan area of
Windsor—Income Tax Act, R.S.C. 1952, c. 148, s. 11(7).
Plaintiff was employed by a person whose principal business
was goods transport and whose head office was in Windsor. He
was required to travel away from his place of work and claimed
deductions for meals consumed in Detroit, for which he was not
reimbursed, under section 11(7) of the Income Tax Act.
Defendant disallowed the deduction on the basis that the City
of Detroit and suburbs were not away from the metropolitan
area of Windsor. Plaintiff sought a judgment that Detroit and
its suburbs were not part of the metropolitan area of Windsor
and that the disbursements were deductible.
Held, the question is answered affirmatively. The City of
Detroit is across an international boundary. It is not integrated
in any way with the City of Windsor, and does not "pertain" or
"belong" in any way to Windsor. There is a very great doubt
that Windsor has a "metropolitan area" at all within the
meaning of the subsection. And, in any event, it would be
nonsensical to hold that Detroit and suburbs were part of the
"metropolitan area" of Windsor.
Lumsden v. Commissioners of Inland Revenue [1914]
A.C. 877 (H.L.), applied.
STATED case.
COUNSEL:
G. J. Courey for respondent (plaintiff).
N. Nichols for applicant (defendant).
SOLICITORS:
Paroian, Courey, Cohen & Houston, Wind-
sor, for respondent (plaintiff).
Deputy Attorney General of Canada for
applicant (defendant).
The following are the reasons for judgment
rendered in English by
GIBSON J.: On this appeal by way of stated
case, the taxpayer, respondent (plaintiff) seeks the
following judgment, namely:
The City of Detroit and its suburbs is not part of the "met-
ropolitan area" of the City of Windsor, and accordingly, the
plaintiff is entitled to deduct disbursements for meals.
The relevant applicable statutory provision is
section 11(7) of the Income Tax Act as it then
was, namely:
(7) Notwithstanding paragraphs (a) and (h) of subsection
(1) of section 12, where a taxpayer was an employee of a
person whose principal business was passenger, goods, or pas
senger and goods transport and the duties of the employment
required him regularly,
(a) to travel, away from the municipality where the employ
er's establishment to which he reported for work was located
and away from the metropolitan area, if there is one, where it
was located, on vehicles used by the employer to transport
the goods or passengers, and
(b) while so away from such municipality and metropolitan
area, to make disbursements for meals and lodging,
amounts so disbursed by him in a taxation year may be
deducted in computing his income for the taxation year to the
extent that he has not been reimbursed and is not entitled to be
reimbursed in respect thereof. [Emphasis added.]
The plaintiff deducted certain sums in the calcu
lation of his taxable income in his 1970 and 1971
taxation years ostensibly pursuant to the said
provisions of section 11(7) of the Income Tax Act,
R.S.C. 1952, c. 148, as amended prior to the
amendment of S.C. 1970-71-72, c. 63.
The Minister of National Revenue has disal
lowed the deduction of such sums on the basis that
such disbursements are not deductible by the
plaintiff pursuant to the said section 11(7), or
otherwise, of the Income Tax Act.
The plaintiff and the Deputy Attorney General
of Canada on behalf of Her Majesty The Queen,
as represented by the Minister, agreed, pursuant to
section 173(1) of the Income Tax Act, and pursu
ant to section 17(3) of the Federal Court Act,
R.S.C. 1970, c. 10 (2nd Supp.), that the question
herein, being of law, fact, or mixed law and fact,
shall be referred to the Federal Court of Canada
for determination.
The question for determination is:
Is the plaintiff entitled to deduct disbursements
for meals by reason that the City bf Detroit and
its suburbs are away from the metropolitan area
of the City of Windsor within the meaning of
section 11(7) of the Income Tax Act, R.S.C.
1952, c. 148?
The parties filed an agreed statement of facts
and issue which reads as follows:
1. At all material times during his 1970 and 1971 taxation
years, the Plaintiff was an employee of a person whose princi
pal business was goods transport;
2. The establishment of his employer to which the Plaintiff
reported to work during his 1970 and 1971 taxation years was
located at 2260 Walker Road, Windsor, Ontario, which place
was located within the municipality of the City of Windsor, of
the Province of Ontario;
3. The duties of the Plaintiff's employment required him regu
larly to travel away from the said municipality on vehicles used
by his employer to transport goods;
4. The Plaintiff, while so away from the said municipality of
the City of Windsor, but while within the City of Detroit, or
within one of the suburbs of that City, made the following
disbursements for meals:
For 1970—$645.
For 1971—$633.
5. The Plaintiff's employer did not reimburse the Plaintiff, nor
was the Plaintiff entitled to any reimbursement in respect of
those disbursements;
6. The Plaintiff in calculating his taxable income for his 1970
and 1971 taxation years deducted the amount of these disburse
ments, and did so on the basis that since neither the City of
Detroit nor its suburbs were a part of the Windsor metropolitan
area, he was entitled to deduct them pursuant to the provisions
of section 11(7) of the Income Tax Act;
7. The Defendant in assessing the tax payable by the Plaintiff
under the Income Tax Act for his 1970 and 1971 taxation
years, disallowed the said deductions in the computation of the
Plaintiffs income, and did so on the basis that the City of
Detroit and its suburbs are not away from the metropolitan
area of the City of Windsor where the employer's establishment
was located, such that the Plaintiff was not entitled to any
deduction pursuant to section 11(7) of the Income Tax Act.
8. In the Plaintiffs capacity as a truck driver employed with a
transport he was required to make three trips daily from the
home terminal of the transport company in the City of Windsor
to the City of Detroit, or to one of the suburbs of that city.
9. When the Plaintiff leaves his employer's place of business,
he does not return until between 10 1 / 2 and 11 hours later.
During such time, the Plaintiff makes three trips with each trip
averaging between 3 1 / 2 and 4 hours.
10. To return to Windsor requires the Plaintiff to cross the
international border and the payment of tolls varying between
$3.40 and $6.30.
11. The meals for which deductions are claimed were taken at
normal meal hours outside of Canada.
12. The Plaintiff has claimed a deduction for meal expenses
incurred by him to the extent of one meal per day for each of
the days he travelled to the City of Detroit, or to one of the
suburbs of that city.
13. The Plaintiff's employer did not reimburse the Plaintiff,
nor was the Plaintiff entitled to any reimbursement in respect
of these expenses.
14. The Plaintiff in his return of income for his 1970 and 1971
taxation years deducted in computing his income these
expenses, and did so on the basis that since neither the city of
Detroit nor its suburbs were a part of the Windsor metropolitan
area, he was entitled to deduct them pursuant to the provisions
of section 8(1)(g) of the Income Tax Act, R.S.C. 1952, c. 148,
as amended by section 1, c. 63, Statutes of Canada 1970-71-72;
15. The Defendant in assessing the tax payable by the Plaintiff
under the Income Tax Act for his 1970 and 1971 taxation
years, disallowed the said deductions in the computation of his
income, and did so on the basis that the city of Detroit and its
suburbs constituted part of the Windsor metropolitan area,
with the consequence that the Plaintiff was not entitled to any
deduction pursuant to section 8(1)(g) of the Act.
16. The question for determination by the Federal Court is:
Is the Plaintiff entitled to deduct disbursements for meals by
reason that the City of Detroit and its suburbs are away from
the metropolitan area of the City of Windsor within the
meaning of section 11(7) of the Income Tax Act R.S.C. 1952
c. I48?
In the determination of this matter, the Court
also takes notice of the following facts:
1. The Municipality of the City of Windsor has
a population of about 250,000;
2. By municipal annexations of urban areas to
the City of Windsor in recent years, the Munici
pality of Sandwich West was substantially
annexed to Windsor so that there is left only in
Sandwich West about 5,000 persons;
3. The Municipality of Sandwich South was
annexed in part to Windsor so that there is now
left in Sandwich South only about 5,000
persons;
4. By annexation the Municipalities of Sand
wich East and Riverside were annexed to Wind-
sor so that they no longer exist;
5. The Municipality of Tecumseh has a popula
tion of about 5,000;
6. There are no other urban areas on the
Canadian side of the border contiguous to or
near the City of Windsor.
7. The City of Detroit is the fifth largest city of
the United States and has surrounding munici
palities of very substantial size contiguous to it
which extend for 20 to 30 miles.
Certain dictionary definitions of the word "met-
ropolitan" are as follows:
Metropolitan ... Of, pertaining to, or constituting a met
ropolis. Also, belonging to or characteristic of the metropolis
(London).... A chief town or metropolis ... .
(The Shorter Oxford English Dictionary on Historical Princi
ples, Third Edition.)
metropolitan ... of, relating to, or characteristic of a
metropolis ....
(New Collegiate Dictionary, A. Merriam-Webster.)
metropolitan ... Of, pertaining to, or characteristic of a
metropolis. 2. Constituting a major urban center and its envi
rons: the metropolitan area .
(Standard College Dictionary, Canadian Edition, Funk &
Wagnalls.)
metropolitan ... of, belonging to a metropolis.
(The Random House Dictionary.)
Certain dictionary definitions of the word "per-
tain" are as follows:
pertain ... To have reference or relation; to relate; as, docu
ments which pertain to the case; to belong or be connected as a
part, adjunct, possession, or attribute, to belong properly or
fittingly;
(The Living Webster Encyclopedic Dictionary of the English
Language.)
pertain ... extend, tend or belong ... To belong; e.g. as a
native, as part of a whole, as an accessory, as dependent ....
(The Shorter Oxford English Dictionary on Historical Princi
ples, Third Edition.)
pertain ... to have reference or relation; relate; documents
pertaining to the case. 2. to belong or be connected as a part,
adjunct, possession, attribute, etc.
(The Random House Dictionary.)
The City of Detroit is across an international
boundary. It is not integrated in any way with the
City of Windsor. For example, there are no
common infra-structures, municipal services such
as streets, water, fire or police protection, and
there is no political connection. It does not "per-
tain" or "belong" in any way to the City of
Windsor.
There is a control of entry and re-entry between
the two cities by the respective federal authorities
of Canada and the United States of America.
After careful consideration of the facts and the
statutory provision of section 11(7) of the Income
Tax Act as it then read, I am of the view, first that
there is very considerable doubt that the City of
Windsor has a "metropolitan area" at all within
the meaning of that subsection of the Act. But, if
it has, it consists of the Municipalities of Sandwich
West, Sandwich South and Tecumseh. And,
second, in any event, it would be nonsensical to
hold that the City of Detroit and its suburbs are
part of the "metropolitan area" of the City of
Windsor. To hold such would be like saying,
(paraphrasing what was said in another context)
that "the one inch tail wags the ninety-nine inch
dog".
As was said by Viscount Haldane in Lumsden v.
Commissioners of Inland Revenue' at page 892:
... it is no doubt true that there are cases of construction where
the natural meaning of the words of a statute is rejected, and
another meaning not expressed by the words taken in their
ordinary sense is read in. That occurs where the context and
scheme of the statute requires that this should be done in order
that the language of the statute as a whole may be read as
consistent. But a mere conjecture that Parliament entertained a
purpose which, however natural, has not been embodied in the
words it has used if they be literally interpreted is no sufficient
reason for departing from the literal interpretation.
and at pages 896-97:
... the duty of judges in construing statutes is to adhere to the
literal construction unless the context renders it plain that such
a construction cannot be put on the words. This rule is especial
ly important in cases of statutes which impose taxation.
Accordingly, the question for determination is
answered in the affirmative.
The plaintiff is entitled to costs.
Either party, by appearance of counsel or under
Rule 324, may move for judgment based on these
Reasons.
Judgment shall not issue until settled by the
Court.
' [1914] A.C. 877 (H.L.).
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.