T-327-78
The Queen (Plaintiff)
v.
Herbert J. Harman (Defendant)
Trial Division, Walsh J.—Ottawa, December 7
and 13, 1978.
Income tax — Income calculation — Inclusions — Stand
by charge for automobile included in Minister's reassessment
of defendant's 1972 taxation year pursuant to s. 6(1)(e) but
reduced by Tax Review Board — Plaintiff appeals that deci
sion and defendant counterclaims contending that the benefit
should be calculated pursuant to s. 6(1)(a) — Income Tax Act,
S.C. 1970-71-72, c. 63, s. 6(1)(a),(e),(2)(a).
This is an appeal from a judgment of the Tax Review Board
allowing in part defendant's appeal against a reassessment of
his 1972 taxation year by the Minister of National Revenue.
That decision reduced the amount included in the Minister's
reassessment for a stand-by charge for personal use of an
automobile provided defendant by his employer. Defendant
counterclaims that the calculation should have been made
under another section of the Act which would have resulted in
an even smaller addition to defendant's income. The legal
argument hinges on the interpretation to be given paragraphs
6(1)(e) and 6(2)(a) of the Income Tax Act and whether they
are properly applied, as the Minister did on the basis that the
car was available at all times, or as the Tax Review Board did
on the basis that the car was available only on weekends or
holidays, or whether, as defendant contends, paragraph 6(1)(e)
should not have been applied at all, but that the benefit should
have been calculated pursuant to paragraph 6(1)(a).
Held, the action is dismissed and the counterclaim is allowed.
The car was not "an automobile available to him in the year for
his personal use" in the case of the present taxpayer. The
wording of the section is ambiguous and might be properly
applied to an executive whose company makes a car available
to him primarily for personal use, but this Court's conclusion
that the word "otherwise" (following the words personal use)
does not mean business use, makes it difficult to avoid the
conclusion that this was not an automobile made available to
the taxpayer for personal use but rather an automobile made
available to him for business use, with personal use being
permitted.
INCOME tax appeal.
COUNSEL:
Wilfrid Lefebvre and Guy Dupont for
plaintiff.
B. A. Crane, Q.C. and Luc Giroux for
defendant.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Duquet & Bronstetter, Montreal, for defend
ant.
The following are the reasons for judgment
rendered in English by
WALSH J.: This is an appeal from a judgment
dated October 7, 1977, of the Tax Review Board
allowing in part defendant's appeal against a reas
sessment made by the Minister of National Reve
nue which included a stand-by charge of $486 in
the computation of defendant's income for his
1972 taxation year for personal use of an automo
bile provided by his employer, which charge was
reduced to $162 in the said decision. Defendant
counterclaimed against this decision of the Tax
Review Board on the basis that the calculation
should have been made under another section of
the Act which allegedly would have resulted in an
even smaller addition to defendant's income.
Although the sums involved are small the issue is
an important one as the decision will affect a very
large number of taxpayers in a similar position to
defendant and it was therefore very thoroughly
and fully argued both before the Tax Review
Board and in this Court. This, I am given to
understand is the first time the issue has been
raised since the current Income Tax Act came into
effect, in which sections 6(1)(e) and 6(2)(a) are
new, not having been in the former Act, although a
section substantially similar to section 6(1)(a) was
in the old Act, R.S.C. 1952, c. 148 as amended,
numbered as section 5(1)(a).
It will be convenient to quote the sections in
question which are to be interpreted in the light of
the facts of the present case:
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:
(e) where his employer made an automobile available to him
in the year for his personal use (whether for his exclusive
personal use or otherwise), the amount, if any, by which an
amount that would be a reasonable standby charge for the
automobile for the aggregate number of days in the year
during which it was made so available (whether or not it was
used by the taxpayer) exceeds the aggregate of
(i) the amount paid by him in the year to his employer for
the use of the automobile, and
(ii) any amount included in computing his income for the
year by virtue of paragraph (a) in respect of the use by
him of the automobile in the year; ...
(2) For the purposes of paragraph (1)(e) "an amount that
would be a reasonable standby charge for the automobile" for
the aggregate number of days in a taxation year during which
it was made available by an employer shall be deemed not to be
less than,
(a) where the employer owned the automobile at any time in
the year, an amount in respect of its capital cost to the
employer equal to the percentage thereof obtained when 1%
is multiplied by the quotient obtained when such of the
aggregate number of days hereinbefore referred to as were
days during which the employer owned the automobile is
divided by 30 (except that if the quotient so obtained is not a
full number it shall be taken to be the nearest full number or,
if there is no nearest full number, then to the full number
next below it), ...
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 (except the benefit he derives from his
employer's contributions to or under a registered pension
fund or plan, group sickness or accident insurance plan,
private health services plan, supplementary unemployment
benefit plan, deferred profit sharing plan or group term life
insurance policy) received or enjoyed by him in the year in
respect of, in the course of, or by virtue of an office or
employment;
The facts are not in dispute. Defendant, a very
frank and clear witness stated that he was
employed as a travelling sales representative by
Brooke Bond Foods Limited (hereinafter called
the employer) since 1957 living in Peterborough,
Ontario, and having a sales area extending from
there to Bancroft and Lake St. Peter in the North,
east to Perth, south to the outskirts of Kingston,
and from there to Bowmanville and northeast to
Lindsay and Haliburton, an area of 10,000 square
miles. In order to cover the territory he would be
away from home two or three nights a week. While
normally he worked a nine-hour day five days a
week, he might be working longer than this on
days when he was returning home from a business
trip to an area perhaps two hours from Peterbor-
ough. He would also on occasion when one of his
customers, for example a restaurant, ran out of
coffee on a Saturday or Sunday make a special
delivery to that customer on one of those days. The
employer, a subsidiary of an English company, was
in the grocery business, selling such items as Black
Diamond cheese, Red Rose tea and an extensive
line of spices. His customers would be independent
grocers, variety stores, restaurants and hotels. Ini
tially a small warehouse was maintained in Peter-
borough with supplies which would be renewed
from Toronto about once a week. He would be
furnished with a delivery truck which he would
keep stocked from the warehouse and make his
sales directly from it. In recent years he primarily
took orders from his customers which would then
be shipped directly to them from his employer.
Eventually the employer instead of providing its
salesmen with delivery trucks provided station
wagons for this purpose. However the station
wagon would normally be loaded with a large
assortment of display items, including posters and
bins. Cardboard display bins for Black Diamond
cheese, for example, would be flat and opened up
for assembly but metal racks for the cheese and
for Red Rose iced tea mix were not collapsible. In
addition large spice racks were provided for retail
stores which when assembled consisted of a series
of shelves and were about four feet wide by six feet
high. They came in six sections that had to be
assembled in the store. Samples of new lines would
also be in the car to show to customers and he
always carried a supply of coffee as restaurants
frequently ran short of it. Accordingly the rear
seat of the station wagon was always closed down
to the floor and the rear of it was normally filled
with merchandise of this sort. On the passenger
side of the front seat he usually kept his briefcases,
order forms and other documents and did his
paper work in the car except for his weekly report
on Friday which he would do in his home.
In practice the vehicle was of little use to him as
a personal car as it would take at least a half hour
to unload it, assisted by some of his children if he
wished to use it for family use when at home.
Actually in 1972, the year with which the assess
ment is concerned, out of a total mileage of 27,780
miles driven only 1,230 miles were for personal
use. He would simply leave the car fully loaded in
the driveway overnight. He did not actually
require it for personal use in any event as his wife
also had a station wagon.
He was required to keep careful records, how
ever, showing the mileage covered each week and
the expenditure for gas, oil and washing of the car
and any other incidental expenses, and distinguish
ing personal mileage from business mileage. The
employer allowed its salesmen who had had an
accident free record the preceding year, such as
defendant, 1,000 free miles of personal use in the
following year; with this exception a charge of 5¢ a
mile was made for personal use. Actually in 1972
defendant paid the company $15 for 300 miles of
personal use which indicates that he paid slightly
more than was necessary, but this is a trivial
matter and not an issue. The company authorized
its salesmen to purchase the cars from local deal
ers so that they could readily be serviced locally,
but set out detailed specifications as to what make
of car should be purchased, what options should be
on the car, and so forth. After finding out which
local dealer would give the best price, this was
then invoiced by the dealer to the company and
paid by it. The company also paid for all insurance
and other expenses of the car.
There were no restrictions prohibiting the per
sonal use of the car, and provided the company
was advised permission could be obtained for a
salesman's wife or adult members of his family to
drive it. It could also be taken across the border if
desired provided the company was notified in
advance. There was very little limitation or control
therefore by the employer on the personal use of
the car by the employee, but in practice it would so
constantly be used for business purposes and most
of the time filled with merchandise that it would
be inconvenient to use it for personal purposes
even if it were available for such use outside of the
hours in which it was being used for business
purposes. In the case of defendant there were only
eight weeks during the year 1972 in which any
personal use was made of the car and the chart
shows that during the weeks which he believes
were his holiday weeks no use was made of it
whatsoever, so apparently if the family went on a
trip during this period it was the wife's car which
was used.
Defendant's evidence was corroborated in all
material respect by William McDiarmid the
Finance Director of the employer. He testified that
the company has 145 salesmen about 35 of whom
would have rural territories and that in all cases
whether the salesman had a city or rural territory
a car is provided by the company on the same basis
as for defendant. This has been company policy
since the 1940's. The free 1,000 miles of personal
use is to encourage safe driving by employees and
as a reward for an accident free record the previ
ous year. Since only 5¢ a mile is charged for
personal use in any event this is equivalent only to
a bonus of $50. He stated that the policy is
somewhat different when senior executives of the
company such as himself are provided with vehi
cles for personal use, since this is then considered
to be part of their compensation and shown on
their T4 slips in the amount approved by the
Income Tax Department. He would pay for his
own gas when his car was used for personal pur
poses. He stated that at one time in accordance
with the policy of the parent company in England
the logo of the company appeared on the side of
the vans provided for salesmen, but that some
years ago this policy was abandoned as they felt
that the advertising value was not great in any
event and that the salesmen would appear to be a
more professional group if they were driving ordi
nary station wagons which served the purpose just
as well without any identification to indicate that
the wagons belonged to the company.
The legal argument hinges on the interpretation
to be given to paragraphs 6(1)(e) and 6(2)(a) and
whether they are properly applied as the Minister
did in this case, whether they should be applied as
the decision of the Tax Review Board did on the
basis that the car was only available to defendant
on weekends, annual holidays and on statutory
holidays, or whether as defendant contends para
graph 6(1)(e) should not have been applied at all
but that the benefit (since he concedes that there
was some benefit) should have been calculated
pursuant to paragraph 6(1)(a), as would have been
done under the old Act.
While the reassessment by the Minister in the
present case was made on March 11, 1974, it
appears to be in accordance with the policy later
set out in Interpretation Bulletin IT-63R dated
September 30, 1974, which reads in part as
follows:
1. The bulletin deals with the amount to be included in an
employee's income for the availability or use of his employer's
automobile. Where the employee actually uses the automobile,
paragraph 6(1)(a) requires the inclusion in his income of the
value of the benefit. Where an employer makes an automobile
available for an employee's use, whether or not he uses it,
paragraph 6(1)(e) requires the employee to include in his
income a charge for having the automobile on standby. Since
paragraph 6(1)(a) is still the main charging section, the stand
by charge is only included in an employee's income to the
extent that it exceeds the aggregate of any amounts already
included in his income by virtue of paragraph 6(1)(a) and any
amounts he paid to his employer for the use of the automobile.
3. An employer is considered to make an automobile available
for an employee's personal use when he gives the employee the
custody and control of the automobile and he does not impose
strictly enforced rules prohibiting its use by the employee for
his own personal purposes....
5. Normally the value of a benefit under paragraph 6(1)(a)
arising from an employee's personal use of the employer's
automobile is that proportion of the total operating cost of the
automobile that his personal use bears to its total use for the
year. For this purpose "operating cost" includes such things as
licences, insurance, repairs, gasoline, oil, servicing charges ...
and capital cost allowance for an automobile owned by the
employer ....
6. A payment by an employee to his employer for his personal
use of the automobile reduces the benefit added to income
under paragraph 6(1)(a).
7. For the purposes of paragraph 6(1)(e), subsection 6(2) sets
out the rules for determining the reasonable standby charge for
an automobile for the aggregate number of days the employer
makes it available for the personal use of an employee during
the period in the year that the employer owned or leased it ....
8. Paragraph 6(1)(e) brings into the employee's income the
amount by which the standby charge exceeds the total of the
amounts brought into income for his use of the automobile
under paragraph 6(l)(a) and the amounts he has paid the
employer for its use ....
Actually no calculation was made under para
graph 6(l)(a), but as the amounts added to
income under that paragraph would be deducted
as a credit on the amounts paid under paragraph
6(l)(e), the result is the same, for, as defendant
points out although no actual calculation for the
application of paragraph 6(1)(a) was submitted in
evidence it would appear that it would be less than
the amount arrived at by the application of para
graph 6(1)(e) and even with the further deduction
of the $15 paid by defendant to his employer for
the use of the car in 1972 by virtue of subpara-
graph 6(1)(e)(î) the total deductions would still be
less than the amounts added to tax by the applica
tion by the Minister of paragraph 6(1)(e).
It goes without saying that the Interpretation
Bulletin is in no way binding on the Court. The
question to be decided is whether paragraphs
6(1)(e) and 6(2)(a) were properly used by the
Minister in this case or can properly be used in
similar cases.
The Minister relies on the use of the word
"available" in paragraph 6(1)(e), noting that the
word is unqualified by any limitation such as
"conveniently available", "available at all times",
or any similar words. The contention is that since
there were no restrictions imposed by the employer
on the car's personal use by defendant it was so
available to him at all times during the year, since
even on the days when it was in business use or
when defendant was away from home with it, it
was still available for his personal use outside of
business hours, and since a day consists of 24
hours it must be considered as having been avail
able at least part of every day in the year for
personal use. Applying the fraction in paragraph
6(2)(a) he reaches a figure of 12% and since the
figure of $4,054.96 as the capital cost of the car is
not disputed by defendant 12% of this works out to
$486 the amount of the assessment. The decision
of the Tax Review Board takes the position that
since a day consists of 24 hours the car is not
available for personal use on any day which it is
not so available for 24 hours and hence working
days should be excluded even if the car might be
available for personal use in the evening. On this
basis the Board concluded that it was available for
personal use on 104 days on Saturdays and Sun-
days to which it adds another 16 days for statutory
holidays and annual leave fixing the availability at
120 days which when divided by 30 gives a figure
of 4%. Applying this to the figure of $4,054.96
results in the amount of $162.20.
Defendant's counsel in arguing that the provi
sions of paragraph 6(1) (e) and the interpreting
paragraph 6(2)(a) should not be applied at all in
the case of someone in the position of defendant,
contends that the emphasis should not be on the
word "available" but on the whole clause "avail-
able ... for his personal use". The car in question
was certainly made available to defendant primari
ly for business use, any personal use permitted
being strictly incidental thereto. It is his conten
tion that this paragraph should only be applied to
the business executive who is provided with a
company car for his personal use, although he is
also expected to use it in connection with his
business, but that for someone in the position of
defendant it is paragraph 6(1) (a) which should be
applied and he should be deemed to be receiving a
benefit as a result of being allowed to use the car
for personal use when it is not being used for
business purposes. In this event, while other
expenses in addition to the capital cost of the car
are taken into consideration, including insurance,
maintenance, gas and oil and so forth, the portion
of these total expenses deemed to be a benefit for
an employee according to defendant would be
determined on the basis of the mileage in which
the vehicle was used for personal use as against the
total mileage of the car in the year in question. In
the present case this would work out to a very low
percentage of something under 5%.
In support of this argument defendant points out
that paragraph 6(1)(e) really starts out by dealing
with an automobile available for personal use, and
only brings in possible business use by the phrase
in parenthesis "whether for his exclusive personal
use or otherwise". Defendant contests the sugges
tion that the word "otherwise" means business use,
contending that it really qualifies the word "exclu-
sive" and really applies to a case where other
people are using it than the taxpayer himself, such
as members of his family or perhaps other
employees of the company. Certainly the word
"otherwise" is a vague and unsatisfactory term to
use in a taxing statute. In the case of Edmonton
National System of Baking Limited v. M.N.R.'
Angers J. commented unfavourably on the use of
the words "or otherwise" in a statute stating at
page 188:
Does it come within the scope of the very general and indefinite
words "or otherwise", too often used in statutes by legislators
who have not a clear and precise notion of the subject treated?
I fully agree with this statement. The French
version of the statute supports this argument, the
words "whether for his exclusive personal use or
otherwise" being translated as "pour son usage
personnel (Ã titre exclusif ou autre)".
Defendant goes further with this reasoning and
states that in subsection 15(5) of the Act dealing
with the situation where an automobile is made
available to a shareholder the English version is
identical in wording to the English version of
paragraph 6(1)(e) but the French translation now
reads "pour son usage personnel (qu'il s'agisse ou
1 [1947] C.T.C.169.
non d'un usage personnel exclusif)". Since a
shareholder can never have any business use for
the car in his capacity as a shareholder, any such
use for company business being as a director or
officer, it is clear that this subsection which deals
only with shareholders as such cannot foresee a
business use of the car and supports defendant's
contention that the word "otherwise" cannot mean
business use. During the course of argument plain
tiff's counsel was prepared to concede to the validi
ty of this reasoning, but still contended that since
the car was available for personal use by defendant
365 days a year paragraphs 6(1)(e) and 6(2)(a)
should apply. If this is so and it is conceded that
paragraph 6(1)(e) which nowhere uses the word
"business" does not foresee business use of the car
but merely deals with personal use then it must be
said that it is a particularly poorly drawn para
graph and would seem to have no application to
situations dealing with business use of the car. It
must be repeated that the word "personal" is what
is emphasized in the paragraph, which would seem
to have no application except to a situation where
the car was provided for the employee for such use
only during the course of the year, and not for the
entire year, in which event it would have some
meaning to charge the employee only with the
portion of the year during which it was available to
him for such personal use.
Plaintiff's counsel stated that the purpose of
paragraph 6(1)(e) was to enable a simple calcula
tion to be made in all cases where an employer
made an automobile available to an employee
whether exclusively or not for personal use and
avoid the more difficult calculation under para
graph 6(1)(a) which was the sort of calculation
that had to be made under the corresponding
paragraph 5 (1) (a) of the former Act. Instead of
basing the charge on the actual use of the car, and
the proportion of all the expenses in connection
therewith, which required also a determination of
the percentage of personal use as compared with
business use, paragraphs 6(1)(e) and 6(2)(a) base
the charge solely on availability of the car whether
it is used or not and apply the percentage formula
so calculated solely to capital cost of the car. It is
true of course that credit is given against the
resulting figure for any amount actually paid by
the employee for such use and for any amount
included under paragraph 6(1) (a) in computing
the taxpayer's income (which figure the assessor
did not even calculate in the present case). The
purpose presumably is to establish as a minimum
figure what is deemed to be "a reasonable standby
charge" in the event that the arrangement made
with the employer as to the amount to be paid by
the taxpayer for the actual use of the car for
personal purposes is so low, or the employee's
personal use of the car is so slight, that the two
when added together are still less than what is
deemed to be "a reasonable standby charge". If a
calculation has to be made under subparagraph
6(1)(e)(ii) however of the amount which would
have been included in the employee's income under
paragraph 6(1)(a), then the whole argument that
paragraph 6(1)(e) is intended to simplify the
assessment fails unless no personal use of the car
whatsoever was made during the year, in which
case no calculation would have to be made under
subparagraph 6(1)(e)(ii). In all other cases a com
putation under paragraph 6(1)(a) would have to
be made and it would be simpler and far more
equitable if a calculation has to be made in any
event to base the assessment on the results of this
calculation. Actually, as pointed out, the Interpre
tation Bulletin issued subsequently foresees the
necessity of this computation.
If paragraph 6(1)(e) is only to be applied in
cases where although the car is available for per
sonal use no such personal use is made, then it
must have a very limited use. Moreover the inter
pretation sought by plaintiff inevitably leads to
extraordinary inequities. Basing the calculation on
availability alone whether the car is used or not for
personal purposes would mean that an executive
who is provided with a company car to use as he
chooses (and this is by no means uncommon since,
especially in the case of small one-man companies,
the personal car of the owner is very frequently
registered in the company's name and the expenses
charged to the company) would only pay 12% of
the capital cost of the car unless he is assessed on
the actual use under paragraph 6(1)(a), whereas
an employee, such as defendant in the present
case, who makes very limited or no use of the car
for personal purposes would be assessed exactly
the same amount by the application of paragraphs
6(1)(e) and 6(2)(a) if the argument is accepted
that it is available to him at all times unless there
is a control or restriction on his personal use, even
if such availability in practice is of necessity lim
ited to weekends, holidays, and possibly some
slight evening use, since it is being fully used for
business purposes at all other times. In fact, based
on the sum of 5¢ a mile charged to defendant in
the present case, after the first 1,000 miles which
he received free, we would have a situation where,
if he had used the car for personal use for 11,000
miles in the year 1972 he would have been charged
for 10,000 miles of such use or $500 and would
have been subject to no assessment under para
graphs 6(1)(e) and 6(2)(a), the $500 he would pay
being greater than the $486 stand-by charge cal
culated on the basis of alleged availability of the
car at all times for personal use, whereas because
he used it for only 1,230 miles he would be subject
to the $486 assessment less the $15 he actually
paid for use of the car if these paragraphs are
applied to him. In other words the greater the
personal use the less the assessment he would have
to pay, which is surely an anomaly which could not
have been intended.
Plaintiff relies on the judgment of Lord Dono-
van in the well known case of Mangin v. I.R.C. 2
where he stated at page 746:
First, the words are to be given their ordinary meaning. They
are not to be given some other meaning simply because their
object is to frustrate legitimate tax avoidance devices ... moral
precepts are not applicable to the interpretation of revenue
statutes.
Secondly, "... one has to look merely at what is clearly said.
There is no room for any intendment. There is no equity about
a tax. There is no presumption as to tax. Nothing is to be read
in, nothing is to be implied. One can only look fairly at the
2 [1971] A.C. 739.
language used": per Rowlatt J. in Cape Brandy Syndicate vs
Inland Revenue Commissioners ... .
Thirdly, the object of the construction of a statute being to
ascertain the will of the legislature it may be presumed that
neither injustice nor absurdity was intended. If therefore a
literal interpretation would produce such a result, and the
language admits of an interpretation which would avoid it, then
such an interpretation may be adopted.
Fourthly, the history of an enactment and the, reasons which
led to its being passed may be used as an aid to its construction.
Reference was also made to the judgment of Lord
Atkinson in Ormond Investment Company, Lim
ited v. Betts 3 at page 162:
... the words of the statute must be adhered to, and that so
called equitable constructions of them are not permissible ....
These and many other cases have established that
equity has no place in the interpretation of tax
statutes.
On the other hand there is a long line of cases
establishing that the imposition of a tax must be
clearly set out in the statute and that any ambigui
ty or uncertainty must be interpreted against the
taxing authority. For example in Ormond Invest
ment Company, Limited v. Betts (supra) Lord
Buckmaster in dealing with the construction of a
tax statute stated at page 151:
... I have not overlooked the cardinal principle relating to Acts
that impose taxation on the subject, a principle well known to
the common law and that has not been and ought not to be
weakened—namely, that the imposition of a tax must be in
plain terms. In the words of Lord Blackburn in Coltness Iron
Co. v. Black ((1881) 6 App.Cas. 315, 330): "No tax can be
imposed on the subject without words in an Act of Parliament
clearly showing an intention to lay a burden on him." It is in
that respect kindred to the creation of a penalty or the estab
lishment of a crime. The subject ought not to be involved in
these liabilities by an elaborate process of hair-splitting
arguments.
In Canada in the Supreme Court case of The
Canadian Northern Railway Co. v. The King 4
Brodeur J. stated at page 275:
A law imposing taxation shall always be construed strictly
against the taxing authorities, since it restricts the public in the
enjoyment of its property.
3 [1928] A.C. 143.
4 (1922) 64 S.C.R. 264.
This judgment was confirmed in the Privy
Council'.
I conclude that in the present case the car was
not "an automobile available to him in the year for
his personal use" in the case of the present taxpay
er. The wording of the section is ambiguous and
might perhaps be properly applied to an executive
whose company makes a car available to him
primarily for personal use, but once it is concluded
that the word "otherwise" (following the words
personal use) does not mean business use, and I
have so concluded, then it is difficult to avoid the
conclusion that this was not an automobile made
available to the taxpayer for personal use but
rather an automobile made available to him for
business use, with personal use being permitted.
This would seem to be a logical literal interpreta
tion of the unfortunate and clumsy wording of
paragraph 6(1)(e), and since there is at the very
least ambiguity and doubt in the interpretation
which must be interpreted against the taxing
authorities the action must be decided against
plaintiff, defendant's counterclaim being main
tained and defendant's 1972 tax assessment being
referred back to the Minister for reassessment
pursuant to the provisions of paragraph 6(1)(a) of
the Act. The fact that it is more in accord with
equity is an added reason for dealing with the
matter in this way, although the proceedings could
not have been decided on that basis alone.
Since plaintiff's action has failed and defend
ant's counterclaim been maintained costs will be in
favour of defendant in any event, but even if this
were not so, the Court would by virtue of the
. provisions of section 178(2)(a) of the Act direct
that plaintiff pay all reasonable and proper costs of
defendant since the amount in controversy does
not exceed $2,500.
5 [1923] 3 D.L.R. 719.
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