Stone
J.A.:
—
This
appeal
from
a
judgment
of
the
Tax
Court
of
Canada
arises
out
of
an
assessment
of
the
appellant’s
income
for
the
taxation
year
1990,
which
included
a
portion
of
the
cost
of
an
expense-paid
trip
taken
by
the
appellant
and
his
wife
to
New
Orleans
on
the
basis
that
the
appellant
received
in
that
year
a
taxable
“benefit”
under
paragraph
6(1
)(a)
of
the
Income
Tax
Act,
R.S.C.
1985
(5th
Supplement),
c.
1,
as
amended.
At
all
material
times,
the
appellant
was
an
account
executive
in
the
London,
Ontario
office
of
the
Wellington
Insurance
Company
and
as
such
had
responsibility
for
maintaining
and
developing
relationships
with
independent
insurance
brokers
and
encouraging
them
to
sell
general
insurance
including
home,
auto
and
business
policies.
As
Wellington
had
no
sales
force
of
its
own,
it
relied
on
independent
brokers
who
also
sold
the
insurance
of
its
competitors.
According
to
the
evidence
at
trial,
all
general
insurers
sell
the
same
basic
coverage.
The
appellant’s
job,
therefore,
was
to
promote
his
employer’s
insurance
to
the
independent
brokers
and
to
create
smooth
relationships
with
them.
In
1989,
Wellington
brought
out
a
broker
incentive
plan
for
its
Ontario
region,
the
purpose
of
which
is
described
by
the
learned
Tax
Court
Judge,
at
page
3
of
his
reasons:
The
program
was
a
tool
which
account
executives,
such
as
Lowe,
used
to
generate
business
for
Wellington.
Brokers
who
sold
new
business
were
awarded
points
and,
upon
achieving
a
certain
quota,
were
eligible
for
a
trip
for
two
to
New
Orleans
on
the
incentive
program.
In
most,
if
not
all,
cases,
the
owner
of
the
brokerage
and
his
or
her
spouse
would
take
the
trip.
During
1989,
the
brokers
would
have
received
brochures
from
Wellington
detailing
the
trip
and
advertising
the
benefits
awaiting
the
winners
of
the
trip.
Account
executives,
such
as
Lowe,
would
encourage
the
brokers
during
the
year
to
purchase
Wellington
products.
The
appellant
and
his
wife
attended
at
New
Orleans
with
the
successful
brokers
at
the
request
of
his
employer
and
at
the
employer’s
expense.
The
expenses
totalled
$4,706
or
$2,353
per
person.
In
assessing
the
appellant,
the
Minister
assumed,
among
other
things,
that
the
business
portion
of
the
cost
of
the
trip
“was
no
greater
than
38%
for
the
appellant,
and
no
greater
than
25%
for
his
spouse”,
calculated
as
follows:
Hours
total
hours
calculated
as
eight
hours
per
day
for
3
days
24hours
4
hours
were
spent
on
formal
business
matters
20
hours
were
unscheduled
leisure
activity
Appellant
(employee)
formals
business
hours:
4
unscheduled
activity
(no
more
than
25%
of
20
hours
being
business
related):
5
9
9/24=38%
spouse
formal
business
hours:
4
unscheduled
activity
(no
more
than
10%
of
20
hours
being
business
related:
2
6
6/24=25%
The
business
portion
of
the
cost
for
both
spouses
was
allowed
as
not
more
than
$1482
i.e.
38%
of
$2,353
plus
25%
of
$2,353.
In
assessing,
the
Minister
assumed
that
the
appellant
had
received
and
enjoyed
a
benefit
“in
respect
of,
in
the
course
of,
or
by
virtue
of
his
employment”
which
had
a
value
of
not
less
$3,224
(arrived
at
by
subtracting
the
business
portion
of
the
cost
($1,482)
from
the
total
cost
to
the
employer
($4,706))
and
that
the
primary
purpose
of
the
trip
was
“personal
pleasure.”
The
appellant
testified
at
trial
as
did
two
officers
of
Wellington
Messrs.
Evans
and
McConachie.
The
latter
two
witnesses
had
also
attended
in
New
Orleans.
No
witnesses
were
called
by
the
respondent.
The
evidence
of
the
witnesses
is
summarized
by
the
Tax
Court
Judge
at
pages
4-7
of
his
reasons:
...Lowe
attended
the
program
in
New
Orleans
as
an
employee
of
Wellington
at
the
direction
of
his
supervisor.
The
trip
was
not
a
holiday
to
Lowe
and
was
not
considered
by
Wellington
to
be
a
’perk’
to
Lowe.
He
was
to
be
present
for
four
days
to
make
sure
the
brokers
for
whom
he
was
responsible
had
a
good
time.
Wellington
asked
the
account
executives
to
go
to
New
Orleans.
They
could
not
refuse;
it
was
part
of
their
job.
Lowe
testified
it
was
his
view
he
could
not
turn
down
the
trip.
His
job
in
New
Orleans,
according
to
Evans
and
McConachie,
was
to
maintain
and
promote
the
relationship
with
the
brokers.
At
the
same
time,
according
to
Evans
and
Lowe,
Lowe’s
wife
was
to
accompany
him.
The
spouses
of
the
brokers
would
be
present
and
Wellington
expected
the
spouses
of
its
account
executives
to
be
present.
Wellington
paid
for
any
babysitting
expenses
incurred
by
an
account
executive
by
virtue
of
his
spouse
attending
at
New
Orleans.
Evans
said
that
unless
there
were
compelling
reasons,
the
spouse
was
expected
to
attend.
Lowe
considered
his
wife’s
presence
in
New
Orleans
as
“part
of
my
job”.
Her
reason
to
be
there,
he
said,
was
to
be
with
brokers
and
build
a
rapport.
“Anything
she
could
do
to
improve
relationships,
she
should
do.”
Because
he
was
“not
given
the
choice
for
his
wife
not
to
attend”,
he
felt
he
did
not
have
the
option
of
her
not
attending.
The
initial
brochure
to
the
brokers
offered:
...a
fabulous
trip-for-two
to
New
Orleans!
Spend
four
sun-filled
days
and
fun-filled
nights
at
the
breathtaking
Royal
Orleans
Hotel
in
the
French
Quarter.
Take
a
starlight
Mississippi
Riverboat
cruise,...
And
dine
as
you
have
never
dined
before!
The
group,
consisting
of
approximately
50
brokers
and
their
wives,
including
ten
account
executives
and
their
spouses,
as
well
as
several
of
Wellington’s
senior
management,
arrived
in
New
Orleans
during
the
afternoon
of
March
28,
1990.
At
about
4:00
p.m.,
the
account
executives
and
their
spouses,
including
Lowe
and
his
wife,
attended
a
two-hour
meeting
where
they
were
given
instructions
on
how
to
deal
with
the
brokers,
when
to
discuss
business
during
the
four
days,
where
to
sit
during
meals
and
also
to
arrange
meetings
with
brokers
and
senior
management
of
Wellington.
The
next
morning,
all
the
brokers
and
their
spouses
and
the
account
executives
and
their
spouses
attended
a
business
meeting
for
about
two
and
a
half
hours.
Various
speakers
made
presentations.
This
culminated
the
formal
business
sessions.
From
then
on,
the
attractions
of
New
Orleans
were
available
to
the
brokers.
However,
account
executives
had
been
instructed
to
make
sure
that
brokers
signed
up
for
the
tours
and
other
activities
and
to
accompany
them
with
their
own
spouse.
Lowe
recalled
discussing
business
with
brokers
to
and
from
what
was
referred
to
as
the
’Honey
Swamp
Tour’
while
his
wife
had
discussions
with
the
spouses
of
the
brokers.
During
the
45
minutes
of
the
tour
itself,
no
business
was
discussed.
Lowe
also
encouraged
brokers
to
meet
with
senior
management
of
Wellington
and
with
the
speakers
who
had
given
talks
during
the
formal
session.
At
meal
time,
account
executives
were
strategically
placed
so
that
contact
with
brokers
would
be
maintained.
Each
day,
Evans
would
meet
with
account
executives
to
make
sure
the
brokers
were
happy.
Lowe
testified
that
throughout
the
four
days
of
the
program,
he
and
his
wife
had
less
than
one
hour
to
themselves
(a
bus
trip
through
New
Orleans);
otherwise,
he
said,
they
were
constantly
occupied
with
the
brokers
and
their
wives.
He
admitted
he
enjoyed
the
trip,
as
he
enjoyed
his
job.
However,
he
said
he
was
not
free
to
do
as
he
wished
when
in
New
Orleans.
He
was
in
New
Orleans
to
serve
his
employer.
The
Tax
Court
Judge
concluded
from
the
evidence
that
the
Minister
had
erred
in
allowing
only
38%
as
the
business
portion
of
the
expenses
incurred
by
the
appellant.
He
was
of
the
view
that
only
20%
of
this
cost
represented
a
taxable
benefit.
At
the
same
time
he
left
unchanged
the
Minister’s
assessment
of
the
benefit
enjoyed
by
the
appellant’s
spouse.
The
Minister’s
assumption
that
the
primary
purpose
of
the
trip
was
personal
pleasure
was
rejected
by
the
Tax
Court
Judge
who
found,
at
pages
9-10:
The
evidence
suggests
the
primary
purpose
of
the
trip
to
New
Orleans
as
far
as
Lowe
is
concerned
was
not
personal
pleasure.
To
the
brokers
and
their
spouses,
it
may
have
been
so.
As
far
as
Lowe
was
concerned,
he
was
present
in
New
Orleans
for
the
purposes
of
his
employer’s
business
and
this
function
was
the
main
purpose
of
his
trip....
Lowe’s
day
was
not
the
eight
hours
assumed
by
the
Minister.
The
evidence
states
he
was
occupied
from
7:30
in
the
morning
to
approximately
11:00
p.m.
He
did
derive
some
enjoyment
and
pleasure
from
the
trip,
he
admitted.
Evans
revealed
that
not
all
Wellington
account
executives
went
to
New
Orleans.
The
account
executives
who
went
to
New
Orleans
were
those
had
the
most
brokers
travelling
to
New
Orleans
as
well
as
the
importance
of
the
business
relationship
with
the
brokers.
If
an
account
executive
convinced
brokers
to
sell
more
Wellington
policies,
his
chances
of
going
to
New
Orleans
increased.
An
account
executive
did
not
go
to
New
Orleans
if
he
had
no
brokers
going
there.
To
this
extent,
I
believe,
the
trip
to
New
Orleans
was
some
type
of
reward
to
the
account
executive.
A
finding
that
the
principal
purpose
of
the
appellant’s
trip
was
not
personal
pleasure
was
repeated
at
page
11
of
his
reasons,
where
the
Tax
Judge
stated
that
Lowe’s
“work
day
in
New
Orleans
was
approximately
14
hours,
of
which
only
a
small
portion
was
available
to
be
used
freely
as
he
may
have
wished.
His
success
with
the
brokers
allowed
him
to
take
the
trip.”
Paragraph
6(1
)(a)
of
the
Income
Tax
Act
is
of
long
standing
and
has
been
the
subject
of
interpretation
by
the
courts
as
well
as
by
Revenue
Canada.
It
provides:
6(1)
There
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
as
income
from
an
office
or
employment
such
of
the
following
amounts
as
are
applicable:
(a)
the
value
of
board,
lodging
and
other
benefits
of
any
kind
whatever
received
or
enjoyed
by
the
taxpayer
in
the
year
in
respect
of,
in
the
course
of,
or
by
virtue
of
an
office
or
employment....
In
his
work
The
Fundamentals
of
Canadian
Income
Tax,
4th
ed.
(Toronto:
Carswell,
1993),
Professor
V.
Krishna
discusses
the
purpose
of
paragraph
6(1
)(a)
as
follows,
at
page
161:
The
purpose
of
para.
6(1
)(a)
is
simple:
it
is
intended
to
equalize
the
tax
payable
by
employees
who
receive
their
compensation
in
cash
with
the
amount
payable
by
those
who
receive
compensation
in
cash
and
in
kind.
In
the
absence
of
this
rule,
the
tax
system
would
provide
an
incentive
for
employees
to
barter
for
non-cash
benefits.
The
result
would
be
a
capricious
and
irrational
tax
system
where
tax
burdens
would
be
determined
more
by
fortuitous
circumstances
of
bargaining
power
than
by
principles
of
fairness.
He
goes
on
immediately
thereafter
to
suggest
what
should
constitute
a
benefit
for
tax
purposes:
What,
then,
constitutes
a
benefit
for
tax
purposes?
There
is
no
single
test
or
determinative
criterion
which
answers
the
question.
Generally,
the
starting
point
is
to
determine
whether
the
item
under
review
provides
the
employee
with
an
economic
advantage
that
is
measurable
in
monetary
terms.
If
there
is
an
advantage,
one
asks:
does
the
primary
advantage
enure
for
the
benefit
of
the
employee
or
the
employer?
[Emphasis
added.]
In
R.
v.
Savage,
[1983]
2
S.C.R.
428,
[1983]
C.T.C.
393,
83
D.T.C.
5409,
a
majority
of
the
Supreme
Court
of
Canada
held
that
a
sum
received
by
the
taxpayer
from
her
employer
as
a
consequence
of
successfully
passing
examinations
for
a
course
voluntarily
taken
away
from
her
workplace
was
not
caught
by
paragraph
6(1)(a).
Dickson
J.,
as
he
then
was,
stated
for
the
majority
at
page
441
(C.T.C.
399;
D.T.C.
5414):
I
agree
with
what
was
said
by
Evans
J.A.
in
R.
v.
Poynton,
[1972]
3
O.R.
727,
at
page
738,
speaking
of
benefits
received
or
enjoyed
in
respect
of,
in
the
course
of,
or
by
virtue
of
an
office
or
employment:
I
do
not
believe
the
language
to
be
restricted
to
benefits
that
are
related
to
the
office
or
employment
in
the
sense
that
they
represent[sic]
a
form
of
remuneration
for
services
rendered.
If
it
is
a
material
acquisition
which
confers
an
economic
benefit
on
the
taxpayer
and
does
not
constitute
an
exemption,
e.g.,
loan
or
gift,
then
it
is
within
the
all-
embracing
definition
of
s.
3.
[Emphasis
added.]
It
seems
clear
that
the
appellant
was
sent
by
his
employer
to
New
Orleans
to
be
present
with
the
successful
brokers
and
their
wives
who
were
expected
to
enjoy
what
was
described
in
the
programme
as
“four
sun-filled
days
and
fun-filled
nights”.
The
business
purpose
behind
the
trip
lay
in
the
fact
that
the
employer
had
a
direct
stake
in
maintaining
and
improving
its
relationships
with
brokers
who
had
experienced
significant
success
in
selling
its
insurance
contracts.
The
employer’s
evident
objective
was
to
foster
or
even
strengthen
business
relationships
by
entertaining
the
brokers
and
their
wives
in
New
Orleans
and
thereby
rewarding
the
brokers
for
that
success.
To
this
end,
the
appellant
was
much
assisted
by
his
wife
who,
with
him,
attended
a
two
hour
meeting
with
the
account
executives
and
their
wives
as
well
as
a
two
and
one-half
hour
meeting
with
the
brokers
and
their
wives.
The
Tax
Court
Judge
found
that
the
account
executives
were
instructed
“to
make
sure
that
the
brokers
sign
up
for
the
tours
and
other
activities
and
to
accompany
them
with
their
own
spouses”.
Evans
met
with
the
account
executives
each
day
to
“make
sure
the
brokers
were
happy”.
According
to
the
appellant’s
evidence,
which
was
not
challenged,
he
and
his
wife
were
constantly
occupied
with
the
brokers
and
their
wives
and
had
little
time
left
over
for
personal
pleasure.
I
agree
with
counsel
for
the
respondent
that
whether
travelling
expenses
in
a
case
such
as
this
are
to
be
viewed
as
a
personal
benefit
turns
heavily
on
the
facts.
In
Hale
v.
Minister
of
National
Revenue,
[1968]
C.T.C.
477,
68
D.T.C.
5326
(Ex.
Ct.),
the
Court
refused
to
treat
an
amount
paid
by
a
life
insurance
company
for
the
expenses
of
the
employee’s
wife
in
attending
with
him
at
a
sales
conference
in
Phoenix,
Arizona
as
a
taxable
benefit
under
the
predecessor
of
paragraphs
6(1
)(a).
It
was
clear
that
the
taxpayer’s
wife,
although
having
no
formal
connection
to
her
husband’s
employer,
was
seen
with
her
husband,
as
it
was
put
by
Cattanach
J.
at
page
479
(D.T.C.
5327),
“as
the
selling
unit”
in
the
employer’s
business.
Again,
in
Arsens
v.
Minister
of
National
Revenue,
69
D.T.C.
81,
the
Tax
Appeal
Board
held
that
the
cost
of
a
trip
to
Disneyland
in
California
which
was
undertaken
primarily
as
a
publicity
promotion
for
the
benefit
of
the
employer’s
company
should
not
be
taxed
as
personal
benefits
in
the
hands
of
the
several
employees
who
attended
on
the
trip.
In
the
words
of
J.O.
Weldon
Q.C.,
the
presiding
member
of
the
Board,
at
page
87:
However,
looking
at
the
substance
of
this
particular
matter,
it
has
not
been
possible
for
me
to
see
any
sound
basis
for
levying
income
tax
against
30
employees
of
Paul’s
Restaurants
Ltd.,
who
went
on
the
Disneyland
trip,
with
the
actual
cost
of
the
trip
because
it
was,
obviously,
undertaken
primarily
for
the
benefit
of
their
employer,
the
interests
of
the
said
employees
being
completely
incidental
thereto....
In
Philp
v.
Minister
of
National
Revenue,
[1970]
C.T.C.
330,
70
D.T.C.
6237
(Ex.
Ct.),
the
Court
was
called
upon
to
determine
to
what
extent,
if
any,
a
taxable
benefit
had
been
conferred
by
a
grocery
chain
on
employees
and
independent
retail
store
managers
in
awarding
them
an
expense-paid
trip
to
Nassau
in
the
Bahamas
as
a
result
of
a
competition
in
selling
the
chain’s
products.
The
appeal
was
allowed
in
part
on
the
basis
that
“something
of
value
in
an
economic
sense”
apart
from
the
business
purpose
of
the
trip
had
been
conferred
on
the
recipients
and
should
be
taxed
accordingly.
At
page
341
(D.T.C.
6244),
Thurlow
J.,
as
he
then
was,
called
attention,
inter
alia,
to
evidence
which
he
regarded
as
supporting
“something
of
value”
to
the
taxpayer:
apart
from
what
was
arranged
for
and
carried
out
in
the
usual
leisure
or
after
hours
of
the
day
a
considerable
portion
of
the
usual
business
or
working
hours
of
each
day
was
made
available
for
leisure
with
an
organized
programme
of
recreational
activities
arranged
for
those
who
wished
to
participate
in
them.
These
activities
as
well
as
a
transportation,
hotel
rooms,
meals
and
receptions
were
all
included
in
the
project
and
were
paid
for
by
Oshawa.
To
my
mind
it
is
clear
therefore
that
to
persons
interested
in
such
an
outing
as
a
holiday,
as
indeed
many
people
are,
the
right
to
take
such
a
trip
represents
something
of
value
in
the
material
sense.
[Emphasis
added.]
This
“something
of
value”
test
was
applied
both
by
the
Trial
Division
and
by
this
Court
in
Hart
v.
R.,
[1981]
C.T.C.
91,
81
D.T.C.
5070
(F.C.T.D)
and
[1982]
C.T.C.
275,
82
D.T.C.
6237
(F.C.A.).
That
case
involved
a
23-day
trip
by
the
appellant
and
his
wife,
a
farming
couple,
to
Australia
and
New
Zealand
in
1977.
Some
of
their
activities
involved
visits
to
agricultural
institutions
and
meeting
with
government
agricultural
officials,
farmers
or
ranchers.
The
trial
Judge,
Mahoney
J.,
as
he
then
was,
found,
however,
at
page
92
(D.T.C.
5071),
that:
A
good
deal
of
this
activity
related
to
matters
of
no
immediate
interest
to
Hartholm
[the
employer],
notably
sheep.
He
went
on
to
conclude,
at
page
93
(D.T.C.
5071-72),
that:
the
tour
was
of
personal
value
to
the
Harts
entirely
apart
from
its
business
value.
There
may
well
be
an
incidental
personal
value
inherent
in
many
purely
business
trips
but
the
personal
benefit
to
the
Harts
in
this
case
was
not
a
mere
incident
of
a
business
trip.
A
holiday
oriented
towards
one’s
business
or
professional
interests
remains
a
holiday;
it
is
not,
per
se,
a
business
trip.
Viewing
the
cost
of
the
trip
as
for
a
combination
of
business
and
pleasure,
Mahoney
J.
treated
one-half
of
the
husband’s
expenses
as
a
personal
benefit
and
upheld
the
Minister’s
assessment
with
respect
to
the
expenses
of
the
spouse.
He
emphasized,
at
page
93
(D.T.C.
5072)
that
his
finding
was
not
to
be
construed
“as
authority
for
the
proposition
that
a
‘busman’s
holiday’
is
necessarily
a
combined
business
and
holiday
trip.”
In
dismissing
the
appeal
from
that
decision,
this
Court
saw
no
ground
for
interfering
with
what
it
regarded
as
“purely
questions
of
fact
and
opinion”,
when
“the
view
taken
by
the
Trial
Judge
is
not
unreasonable
or
based
on
some
erroneous
principle”
and
the
findings
being
“well
supported
by
the
evidence”.
Thurlow
C.J.
described
the
tour
to
Australia
and
New
Zealand,
at
page
276
(D.T.C.
6239),
in
the
following
terms:
The
tour
program,
while
predominantly
concerned
with
activities
that
would
be
of
interest
to
persons
engaged
in
agricultural
operations
and
which,
for
that
reason,
might
be
of
little
interest
to
persons
of
other
callings
was...nevertheless
a
holiday.
/t
was
a
tour
of
such
activities
combined
with
visits
to
other
points
of
interest
to
tourists
generally
and
with
activities
and
entertainment
quite
unrelated
to
agricultural
pursuits.
It
is
impossible,
in
my
view,
to
conclude
that
such
a
tour
was
purely
or
even
essentially
a
business
trip
or
that
it
had
no
value
as
a
holiday
and
represented
no
economic
benefit
as
a
holiday
trip
received
or
enjoyed
by
the
appellant.
[Emphasis
added.
I
Although
the
Philp
test
is
expressed
in
different
words,
it
is
not
dissimilar
from
that
of
Poynton
as
approved
in
Savage,
supra,
-
“a
material
acquisition
which
confers
an
economic
benefit
on
the
taxpayer”.
It
seems
to
me
in
light
of
existing
jurisprudence
that
no
part
of
the
appellant’s
trip
expenses
should
be
regarded
as
a
personal
benefit
unless
that
part
represents
a
material
acquisition
for
or
something
of
value
to
him
in
an
economic
sense
and
that
if
the
part
which
represents
a
material
acquisition
or
something
of
value
was
a
mere
incident
of
what
was
primarily
a
business
trip
it
should
not
be
regarded
as
a
taxable
benefit
within
subparagraph
6(1
)(a)
of
the
Act.
The
Tax
Court
Judge
found
that
the
primary
purpose
of
the
appellant’s
trip
to
New
Orleans
was
not
for
personal
pleasure
but
for
the
purposes
of
the
employer’s
business
and
allowed
80%
of
the
appellant’s
costs
as
the
business
portion
of
the
trip.
His
refusal
to
allow
the
whole
as
business
expenses
was
based
on
the
view
that
the
trip
to
New
Orleans
was
to
an
extent
to
“reward”
him
and
because
he
derived
some
pleasure
from
the
trip.
When
the
time
spent
in
New
Orleans
by
the
appellant
on
the
employer’s
business
is
considered,
it
can
be
readily
seen
that
the
appellant
had
precious
little
time
left
over
for
personal
pleasure.
Nor
is
it
clear
that
there
was
any
element
of
“reward”
for
the
appellant.
It
may
well
be,
depending
on
the
circumstances,
that
a
true
“reward”
situation
could
support
a
conclusion
that
a
trip
was
somehow
earned
by
an
employee
so
as
to
make
the
cost
thereof,
in
whole
or
in
part,
taxable
in
the
hands
of
the
employee.
The
essential
question
in
the
present
case,
it
seems
to
me,
is
whether
on
the
facts
the
principal
purpose
of
the
trip
was
business
or
pleasure.
Here
it
was
found
to
be
the
former.
Any
pleasure
derived
by
the
appellant
must,
in
my
view,
be
seen
as
merely
incidental
to
business
purposes
having
regard
to
the
fact
that
the
overwhelming
portion
of
the
appellant’s
time
in
New
Orleans
was
devoted
to
business
activities.
I
am
similarly
of
the
view,
with
respect,
that
the
Tax
Court
Judge
erred
in
treating
the
expenses
of
the
appellant’s
spouse
as
a
personal
benefit
under
paragraph
6(1
)(a).
In
concluding
that
the
presence
of
the
spouse
in
New
Orleans
was
not
necessary,
the
trial
judge
appears
to
have
drawn
heavily
on
his
view
that
as
a
matter
of
law
the
spouse
was
under
no
obligation
to
be
present
and
the
employer
could
not
require
her
presence
in
New
Orleans.
As
he
put
it,
at
pages
10-11:
In
these
days,
as
in
1989
and
1990,
spouses,
wives
in
particular,
are
under
no
obligation
to
follow
the
dictates
of
their
spouses’
employers,
if
this
was
ever
the
case.
Times
have
changed.
There
was
no
evidence
Lowe’s
wife
was
subject
to
the
interview
and
“education”
process
described
in
Hale
v.
Minister
of
National
Revenue,
68
D.T.C.
5326,
at
page
5327.
I
am
not
satisfied
that
Lowe’s
wife’s
attendance
in
New
Orleans
was
tantamount
to
being
obligatory,
as
described
by
Cattanach,
J.
in
Hale
at
page
5328.
In
my
view,
while
the
existence
of
a
legal
obligation
as
in
Hale
is
not
present
in
the
case
at
bar,
the
Tax
Court
ought
nevertheless
to
have
con-
sidered
on
the
evidence,
which
was
not
contradicted,
whether
the
spouse’s
presence
with
her
husband
in
New
Orleans
at
the
request
of
the
employer
was
primarily
to
serve
the
employer’s
business.
The
evidence
seems
clear
that
during
the
period
of
her
stay
in
New
Orleans
the
appellant’s
spouse
attended
the
same
meetings
as
did
her
spouse
with
the
same
objectives
in
mind
and
that
she,
like
him,
devoted
the
vast
percentage
of
her
time
attending
to
the
brokers
and
their
wives.
That
evidence
was
not
rejected
or
even
commented
upon
unfavourable
by
the
Tax
Court
Judge.
No
doubt
she,
like
her
husband,
“enjoyed
the
trip”,
but
enjoying
a
trip
which
is
devoted
primarily
to
the
husband’s
role
as
an
employee
on
behalf
of
his
employer
over
the
course
of
very
lengthy
work
days
should
not,
in
my
view,
be
seen
in
the
circumstances
of
this
case
as
giving
rise
to
a
personal
benefit
either
to
the
spouse
or
to
the
employee.
Any
personal
enjoyment
of
the
trip
by
the
spouse
should,
like
that
of
the
appellant,
be
viewed
as
merely
incidental
to
what
was
primarily
a
business
trip
by
both
spouses
for
the
purpose
of
advancing
the
employer’s
business
interests.
Paragraph
6(1
)(a)
is
cast
in
broad
and
somewhat
vague
language.
I
am,
accordingly,
satisfied
that
this
is
a
proper
case
for
having
some
regard
to
the
Department
of
National
Revenue’s
own
interpretations
in
construing
paragraph
6(1
)(a)
even
though
they
are
non-binding.
Resort
to
such
interpretations
for
such
purpose
was
recognized
by
this
Court
in
Vaillancourt
v.
R.
(sub
nom.
Vaillancourt
v.
Canada),
[1991]
2
C.T.C.
42,
91
D.T.C.
5408,
at
page
48
(D.T.C.
5412),
where
Décary
J.A.
stated:
Finally,
since
reference
will
later
be
made
to
the
Interpretation
Bulletins
published
by
Revenue
Canada,
it
is
worth
noting
at
once
the
rules
governing
use
of
these
Bulletins
to
interpret
a
particular
provision.
It
is
well
settled
that
Interpretation
Bulletins
only
represent
the
opinion
of
the
Department
of
National
Revenue,
do
not
bind
either
the
Minister,
the
taxpayer
or
the
courts
and
are
only
an
important
factor
in
interpreting
the
Act
in
the
event
of
doubt
as
to
the
meaning
of
the
legislation.
(Harel
v.
Deputy
Minister
of
Revenue
(Quebec),
[1978]
1
S.C.R.
851,
77
D.T.C.
5438,
at
page
858,
de
Grandpre,
J.;
Nowegijick
v.
R.,
[1983]
1
S.C.R.
29,
at
page
37,
Dickson,
J.;
Bryden
v.
Canada
Employment
and
Immigration
Commission,
[1982]
1
S.C.R.
443
at
page
450,
Ritchie,
J.;
Mattabi
Mines
Ltd.
v.
Ont
(Min.
of
Revenue),
[1988]
2
S.C.R.
175,
at
pages
189
and
196
et
seq.,
Wilson,
J.)
Having
said
that,
I
note
that
the
courts
are
having
increasing
recourse
to
such
Bulletins
and
they
appear
quite
willing
to
see
an
ambiguity
in
the
statute
—
as
a
reason
for
using
them
—
when
the
interpretation
given
in
a
Bulletin
squarely
contradicts
the
interpretation
suggested
by
the
Department
in
a
given
case
or
allows
the
interpretation
put
forward
by
the
taxpayer.
When
a
taxpayer
engages
in
business
activity
in
response
to
an
express
inducement
by
the
Government
and
the
legality
of
that
activity
is
confirmed
in
an
Interpretation
Bulletin,
it
is
only
fair
to
seek
the
meaning
of
the
legislation
in
question
in
that
bulletin
also.
As
Prof.
Côté
points
out
in
The
Interpretation
of
Legislation
in
Canada
(supra),
note
4,
at
page
446:
“The
administration’s
presumed
authority
and
expertise
is
never
more
persuasive
than
when
the
judge
succeeds
in
turning
it
against
its
author,
demonstrating
a
contradiction
between
the
administration’s
interpretation
and
its
contentions
before
the
Court.”
The
appellant
draws
the
Court’s
attention
to
certain
paragraphs
in
Interpretation
Bulletins
Nos.
IT-131R2
and
IT-470R.
Although
the
first
of
these
makes
some
reference
to
expenses
incurred
by
an
employee
as
well
as
by
a
spouse
of
an
employee,
it
is
of
no
relevance
to
the
present
case
because
Interpretation
Bulletin
IT-131R2
is
expressly
confined
to
“the
deduction
provided
under
subsection
20(10)...in
respect
of
expenses
incurred
by
the
taxpayer
in
attending
up
to
two
conventions
a
year”
in
connection
with
a
business
or
profession.
Interpretation
Bulletin
IT-470R,
on
the
other
hand,
deals
explicitly
with
the
interpretation
of
various
provisions
of
the
Act
including
paragraph
6(1
)(a)
under
the
rubric
of
“employee’s
fringe
benefits”.
Part
A,
dealing
with
“Amount
to
be
Included
in
Income”
includes
under
the
subheading
of
“Holiday
Trips,
Other
Prizes
and
Incentive
Awards”,
includes
the
following:
11.
In
a
situation
where
an
employee's
presence
is
required
for
business
purposes
and
this
function
is
the
main
purpose
of
the
trip,
no
benefit
will
be
associated
with
the
employee
*s
travelling
expenses
necessary
to
accomplish
the
business
objectives
of
the
trip
if
the
expenditures
are
reasonable
in
relation
to
the
business
function.
Where
a
business
trip
is
extended
to
provide
for
a
paid
holiday
or
vacation,
the
employee
is
in
receipt
of
a
taxable
benefit
equal
to
the
costs
borne
by
the
employer
with
respect
to
that
extension.
12.
There
may
be
instances
where
an
employee
acts
as
a
host
or
hostess
for
an
incentive
award
trip
arranged
for
employees,
suppliers
or
customers
of
the
employer.
Such
a
trip
will
be
viewed
as
a
business
trip
provided
the
employee
is
engaged
directly
in
business
activities
during
a
substantial
part
of
each
day
(e.g.,
as
organizer
of
activities)
otherwise
it
will
be
viewed
as
a
vacation
and
a
taxable
benefit,
subject,
of
course,
to
a
reduction
for
any
actual
business
activity.
[Emphasis
added.]
Paragraph
15,
under
the
subheading
“Travelling
Expenses
of
Employee’s
Spouse”,
reads:
15.
Where
a
spouse
accompanies
an
employee
on
a
business
trip
the
payment
or
reimbursement
by
the
employer
of
the
spouse’s
travelling
expense
is
a
taxable
benefit
to
the
employee
unless
the
spouse
was,
in
fact,
engaged
primarily
in
business
activities
on
behalf
of
the
employer
during
the
trip.
[Emphasis
added.]
It
can
be
seen
on
the
particular
record
before
us,
that
the
appellant’s
presence
in
New
Orleans
was
required
for
his
employer’s
business
and
that
this
was
the
main
purpose
of
the
trip.
The
record
also
shows
that
the
spouse
was
engaged
primarily
in
business
activities
on
behalf
of
the
appellant’s
employer
during
her
stay
in
New
Orleans.
I
would
allow
the
appeal
with
costs,
set
aside
the
Judgment
of
the
Tax
Court
of
Canada
of
February
27,
1995
except
for
the
awarding
of
costs
and
would
refer
the
matter
back
to
the
Minister
for
reconsideration
and
reassessment
on
a
basis
consistent
with
these
reasons.
Appeal
allowed.
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