Fernando v. Canada
T-1164-91
Rothstein J.
23/6/93
14 pp.
Appeal from decision of Tax Court of Canada dismissing plaintiff's claim for want of prosecution -- Whether legal expenses and interest expense incurred by employee in wrongful dismissal proceedings deductible for income tax purposes -- Plaintiff wrongly dismissed, reinstated following interim award of arbitration board -- Entitled to insurance benefits, wages, vacation and overtime following final award of arbitrator -- Balance of $31,930.99 for legal fees not paid by plaintiff as considering billing excessive -- Agreement to pay legal fees of $8,000 in full satisfaction of claim -- Sum of $3,750 paid in 1985, $4,250 paid in 1986 -- Plaintiff entitled to deduct legal fees under Income Tax Act, s. 8(1)(b) -- Expense directly related to earning of income should be deductible -- Distinction between right to income and right to establish right to income irrelevant in context of wrongful dismissal -- Legal expenses deductible if incurred to collect or establish right to salary or wages -- Basic amount ordered and paid herein wages, not retiring allowance as plaintiff ordered reinstated -- No legal fees paid in 1983 -- Legal fees paid in 1985 amounting to $3,750 -- Latter paid in respect of collection of wages -- Plaintiff not entitled to claim interest in respect of amount borrowed to pay legal fees under Act, s. 20(1)(c) -- Appeal allowed in part -- Income Tax Act, S.C. 1970-71-72, c. 63, ss. 8, 20.