Zylstra et al. v. Minister of National Revenue, (1994) 86 F.T.R. 184 (TD)

• Judge: MacKay, J.
• Court: Federal Court (Canada)
• Case Date: November 04, 1994
• Jurisdiction: Canada (Federal)
• Citations: (1994), 86 F.T.R. 184 (TD)

Zylstra v. MNR (1994), 86 F.T.R. 184 (TD)

MLB headnote and full text

Estate of the Late Bernard Zylstra (plaintiff) v. Her Majesty the Queen (defendant)

(T-494-90)

Jacob Small (plaintiff) v. Her Majesty the Queen (defendant)

(T-495-90)

William J. McRae (plaintiff) v. Her Majesty the Queen (defendant)

(T-496-90)

Robert E. Vandervennen (plaintiff) v. Her Majesty the Queen (defendant)

(T-497-90)

Indexed As: Zylstra et al. v. Minister of National Revenue

Federal Court of Canada

Trial Division

MacKay, J.

November 4, 1994.

Summary:

Four taxpayers each appealed their respective income tax assessments, asserting that the Minister of National Revenue erred in disallowing a deduction claimed as a residence allowance for a clergy's residence under s. 8(1)(c) of the Income Tax Act.

The Tax Court of Canada, in decisions reported 89 D.T.C. 663 and 89 D.T.C. 657, dismissed the appeals. The taxpayers appealed. At the request and on consent of the parties, the appeals were tried on common evidence.

The Federal Court of Canada, Trial Division, dismissed the appeals.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - Section 8(1)(c) of the Income Tax Act permitted a residence deduction from office or employment income where the taxpayer was "... a member of the clergy or of a religious order or a regular minister of a religious denomination, and is in charge of, or ministering to a diocese, parish or congregation, or engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination" - The Federal Court of Canada, Trial Division, reviewed the general principles of interpretation - See paragraphs 12 to 14 - The court concluded that s. 8(1)(c) only provided a deduction where the taxpayer qualified by reasons of his status or office and discharged responsibilities as defined, which were ordinarily associated with that status or office - See paragraph 14.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - Two members of the Institute for Christian Studies (ICS) and two members of the Ontario Bible College and Ontario Theological Seminary (OBC) each claimed to be members of a "religious order" and sought a clergy's residence deduction from their respective business and employment income under s. 8(1)(c) of the Income Tax Act - The Federal Court of Canada, Trial Division, concluded that the ICS and the OBC were not "religious orders" under s. 8(1)(c), where (1) there was no expression of faith or of religious purposes of either institution apart from their education purposes, that would mark them as distinct from their respective churches or denominations; and (2) both had their primary purposes in education - See paragraphs 15 to 36.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - A taxpayer claimed, as a "member of the clergy", a clergy's residence deduction from his office or employment income under s. 8(1)(c) of the Income Tax Act - The taxpayer was a member of the Ontario Bible College and Ontario Theological Seminary - Within his church, the Brethren Assembly, he was acknowledged and had status as a commended worker, a status recognized by ceremony and by unanimous support of the elders of three congregations - There were no ordinations in the church - The Federal Court of Canada, Trial Division, concluded that the taxpayer was not a "member of the clergy" within the meaning of s. 8(1)(c), where all members of the Brethren Assembly were of equal status - See paragraphs 37 to 40.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - A taxpayer claimed a clergy's residence deduction from his office or employment income under s. 8(1)(c) of the Income Tax Act - The taxpayer was a member of the Ontario Bible College and Ontario Theological Seminary - He was an ordained minister and had served at three churches before joining the College - The Federal Court of Canada, Trial Division, concluded that although the taxpayer was a "member of the clergy" and a "regular minister" within the meaning of s. 8(1)(c), he did not qualify for a deduction where he did not meet the functional test of ministering to a congregation - See paragraphs 41 to 54.

Income Tax - Topic 589

Income from office or employment - Deductions - Clergy's residence - Two members of the Ontario Bible College and Ontario Theological Seminary (the OBC), claimed a clergy's residence deduction from their respective office or employment income under s. 8(1)(c) of the Income Tax Act - The Federal Court of Canada, Trial Division, concluded that both members failed the functional test of "ministering to a congregation" under s. 8(1)(c) - OBC was not a congregation, i.e., "... a body recognized by a religious denomination for its regular organizational religious activities - OBC was representative of, and serving several denominations and, moreover, faculty staff and students, and clearly alumni, were encouraged or would rely upon their own denominational church congregations for their primary spiritual life - See paragraphs 43 to 54.

Income Tax - Topic 3901

Interpretation - General - [See first Income Tax - Topic 589 ].

Words and Phrases

Religious order - The Federal Court of Canada, Trial Division, discussed the meaning of "religious order" as used in s. 8(1)(c) of the Income Tax Act, S.C. 1970-71-72, c. 63 - See paragraphs 15 to 33.

Words and Phrases

Congregation - The Federal Court of Canada, Trial Division, discussed the meaning of "congregation" as used in s. 8(1)(c) of the Income Tax Act, S.C. 1970-71-72, c. 63 - See paragraphs 50 to 54.

Words and Phrases

Member of the Clergy - The Federal Court of Canada, Trial Division, discussed the meaning of "member of the clergy" as used in s. 8(1)(c) of the Income Tax Act, S.C. 1970-71-72, c. 63 - See paragraphs 37 to 42.

Words and Phrases

Regular Minister - The Federal Court of Canada, Trial Division, discussed the meaning of "regular minister" as used in s. 8(1)(c) of the Income Tax Act, S.C. 1970-71-72, c. 63 - See paragraph 42.

Cases Noticed:

Stubart Investments Ltd. v. Minister of National Revenue, [1984] 1 S.C.R. 536; 53 N.R. 241; 84 D.T.C. 6305, refd to. [para. 12].

Wipf v. Minister of National Revenue (1973), 73 D.T.C. 5558 (F.C.T.D.), revd. 7 N.R. 72; 75 D.T.C. 5034 (F.C.A.), refd to. [para. 32].

Guthrie v. Minister of National Revenue (1955), 55 D.T.C. 605 consd. [para. 45].

Bloom v. Minister of National Revenue (1963), 64 D.T.C. 39 (T.A.B.), consd. [para. 46].

Attwell v. Minister of National Revenue (1967), 67 D.T.C. 611 (T.A.B.), consd. [para. 47].

Adam v. Minister of National Revenue (1974), 74 D.T.C. 1220 (T.R.B.), consd. [para. 47].

Kolot v. Minister of National Revenue (1992), 92 D.T.C. 2391 (Tax C.C.), consd. [para. 48].

Statutes Noticed:

Income Tax Act, Interpretation Bulletins, IT-141 [para. 26].

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 8(1)(c) [para. 4]; sect. 110(2) [para. 32].

Institute for Christian Studies Act 1983, S.O. 1983, c. Pr 25, sect. 3 [para. 20].

Interpretation Bulletins, Income Tax Act - see Income Tax Act.

Ontario Bible College and Ontario Theological Seminary Act, S.O. 1982, c. 79, sect. 3(1) [para. 15].

Authors and Works Noticed:

Canada, House of Commons Debates (1949), pp. 1633-1634; (1956), pp. 6775-6777 [para. 13].

Canadian Living Webster Encyclopedic Dictionary of the English Language (1974), vol. II, p. 810 [para. 26].

Hansard - see Canada, House of Commons Debates.

Oxford English Dictionary (1973), vol. 1, p. 1697 [para. 26].

Oxford English Dictionary on Historical Principles (1909), vol. VII, pp. 181, 182 [para. 26].

Counsel:

John Campbell, for the plaintiffs;

Susan Van Der Huot and Eric Noble, for the defendant.

Solicitors of Record:

Miller Thomson, Toronto, Ontario, for the plaintiff;

George Thomson, Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant.

These appeals were heard on February 21 to 24, 1994, at Toronto, Ontario, before MacKay, J., of the Federal Court of Canada, Trial Division, who delivered reasons for judgment on November 4, 1994.