Date: 19980127
Docket: 97-698-IT-I
BETWEEN:
FRANÇOIS ROY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
G. Tremblay, J.T.C.C.
Issue
[1] According to the Notice of Appeal and the Reply to the Notice of Appeal, the issue is whether, given the fact that the appellant went bankrupt on July 2, 1996, where he and his former spouse Sylvie Tremblay had joint custody (as of April 1995) of their two children, Sabrina and Nicolas:
(1) he has the capacity to be a party to an action;
(2) the Court can hear the appeal;
(3) (if the answer to question 2 is yes) he is the eligible individual in respect of his son Nicolas for the period from May 1995 to June 1997 for the 1993, 1994 and 1995 base taxation years.
The appellant maintains that he paid 50 percent of the expenses incurred for the two children.
Burden of proof
[2] The appellant bears the burden of showing that the respondent’s assessments are ill-founded. This burden of proof derives from a number of judicial decisions, including that of the Supreme Court of Canada in Johnston v. Minister of National Revenue.[1]
[3] In Johnston, the Court held that the facts assumed by the respondent to support her decision are also presumed to be true until proven otherwise. In the case at bar, the facts assumed by the respondent are described in subparagraphs (a) to (f) of paragraph 8 of the Reply to the Notice of Appeal. That paragraph reads as follows:
[TRANSLATION]
8. In issuing the notices of determination of child tax benefits dated February 20, 1997, for the 1993, 1994 and 1995 base taxation years, the Minister relied, in particular, on the following facts:
(a) the appellant and Sylvie Tremblay (hereinafter “the former spouse”) cohabited; [admitted]
(b) they had two children: Sabrina, born on November 9, 1991, and Nicolas, born on June 13, 1993; [admitted]
(c) in April 1995, the appellant and his former spouse decided that they would have joint custody of their children, Sabrina and Nicolas; [denied]
(d) pursuant to a court judgment rendered on June 20, 1996, the appellant and his former spouse were granted joint custody of their two children, Sabrina and Nicolas; [admitted]
(e) the appellant went bankrupt on July 2, 1996; [admitted]
(f) the Minister reviewed the appellant’s child tax benefits for the 1993, 1994 and 1995 base taxation years and granted benefits only for his daughter Sabrina: $180.33 for the period of May and June 1995 for the 1993 base taxation year, $1,369.00 for the period from July 1995 to June 1996 for the 1994 base taxation year and $1,117.40 for the period from July 1996 to June 1997 for the 1995 base taxation year. [admitted that this is the Minister’s decision to which the appellant objects]
Whether the appellant has the capacity to be a party to an action
[4] The appellant went bankrupt on July 2, 1996, and was discharged on April 2, 1997. The respondent, relying on article 56 of the Quebec Code of Civil Procedure, argued that the appellant did not have the capacity to be a party to an action. When the appellant filed his Notice of Appeal on February 18, 1997, he had not yet been discharged from the bankruptcy and it was the trustee who had that capacity. Article 56 reads as follows:
56. A person must be able to fully exercise his rights to be a party to an action in whatever form it may be, saving contrary provisions of law.
A person who is not able to fully exercise his rights must be represented, assisted or authorized, in the manner provided by the laws which govern his status and capacity or by this Code.
The irregularity resulting from failure to be represented, assisted or authorized has no effect unless it is not remedied, and this may be done retroactively at any stage of a case, even in appeal.
[5] The appellant said that he spoke to the trustee about the dispute between him and Ms. Tremblay over the child tax benefits. The trustee told him that he would not get involved in the matter, but that if the appellant himself wished to do so, he could.
[6] In my view, the appellant therefore had the trustee’s authorization to proceed. He had the capacity to be a party to an action, and the Court is entitled to hear him.
Facts in evidence
[7] The balance of the evidence shows that from April 1995 to June 30, 1996, the appellant had primary custody of his two children. That decision was made due to the fact that the parties could not proceed for more than a year because the court’s schedule was full.
However, Sylvie Tremblay, who worked irregular hours as a nurse during the day and at night, took the children only sporadically. The appellant nonetheless paid her 50 percent of the benefits received.
[8] On June 20, 1996, the parties went to court and it was decided that they would have joint custody, each of them a week at a time, until an investigation had been conducted and the court had reviewed the entire case.
[9] Since the appellant was no longer receiving the child tax benefits, he called the persons responsible for issuing the cheques. He was told that he no longer had custody of the children as of July 1, which was not true. He was also told that the decision had been made at Sylvie Tremblay’s request, without considering the court’s decision or conducting an investigation.
[10] At the beginning of October 1996, Serge Delisle, an investigator, met with the appellant and, in light of the temporary joint custody decision, proposed that benefits be paid to the appellant for one child and to Ms. Tremblay for the other. He also told the appellant that he had to ask Sylvie Tremblay whether she agreed to the proposal.
[11] Mr. Delisle subsequently informed the appellant that Ms. Tremblay had turned down his proposal. She preferred to receive the benefits and pay half the money to the appellant herself. The appellant never received half of the benefit cheques from Ms. Tremblay.
[12] In addition, the appellant was asked to repay half of the benefits he had received from April 1995 to June 1996 (para. [3]: 8(f)).
[13] After hearing the evidence, the Court is of the opinion that given the settlement of the bankruptcy, there is no legal effect on the repayments being claimed. Moreover, apart from the above argument, and in view of the balance of the evidence and the agreement with the respondent, it is decided that the appellant had joint custody of at least one of the two children, namely his daughter Sabrina, from April 1995 to June 30, 1996, and that he does not owe the Minister anything.
Conclusion
[14] The appeal is allowed.
Signed at Québec, Canada, this 27th day of January 1998.
“Guy Tremblay”
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 17th day of June 1998.
Mario Lagacé, Revisor