Date: 20000124
Docket: 1999-2831-IT-I
BETWEEN:
ELIZABETH PIORKOWSKI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
P.R. Dussault, J.T.C.C.
[1] These are appeals from determinations made by the Minister of National Revenue on May 12 and June 19, 1998 that the appellant was not an eligible individual under section 122.6 of the Income Tax Act (the“Act”) in respect of Courtney and Justin, the children of her common-law spouse, Mr. James Klimas, for the period of April 1996 to June 1996 for the base year 1994, for the period of July 1996 to June 1997 for the base year 1995 and for the period of July 1997 to June 1998 for the base year 1996.
[2] Paragraphs 5 and 6 of the Reply to the Notice of Appeal state the following:
In so assessing the Appellant, the Minister made the following assumptions of fact:
on the 11th of December 1996, the Superior Court of Quebec granted a judgment of divorce between Mrs. Wendy O’Brien and Mr. James Klimas, which judgment took effect on the 25th of October 1996;
Courtney and Justin are the minor children of Mrs. Wendy O’Brien and Mr. James Klimas;
during the base years in litigation, Mr. James Klimas was the common-law spouse of the Appellant;
in March 1997, Mr. James Klimas made an application for child tax benefit (hereinafter, the “ CTB ”) for the children;
in May 1997, as Mr. James Klimas, made a second application for CTB for the children, the Minister sent to Mrs. Wendy O’Brien and Mr. James Klimas, questionnaires to determine the joint custody of the children;
in June 1997, the Minister reviewed the questionnaires to determine the eligibility for the CTB;
in July 1997, following the review, the Minister determined that Mr. James Klimas was not considered to be the primary caregiver for the children;
consequently, the Minister issued child tax benefit notices on May 12, 1998 for the base year 1994, and on June 19, 1998 for the base years 1995 and 1996, refusing the Appellant the eligibility for the CTB for the children.
At the objection stage, the Minister had many contacts with Mrs. Wendy O’Brien, Mr. James Klimas, the Appellant and the practitioners of the children, and determined that Mrs. Wendy O’Brien was considered to be the primary caregiver for the children.
[3] The only question in issue is whether the Minister was wrong in determining that the appellant was not the eligible individual for the periods in issue.
[4] The definition of “eligible individual” in section 122.6 of the Act reads:
“eligible individual” – “eligible individual” in respect of a qualified dependant at any time means a person who at that time
(a) resides with the qualified dependant,
is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of the qualified dependant,
is resident in Canada,
is not described in paragraph 149(1)(a) or (b), and
is, or whose cohabiting spouse is, a Canadian citizen or a person who
is a permanent resident (within the meaning assigned by the Immigration Act),
is a visitor in Canada or the holder of a permit in Canada (within the meanings assigned by the Immigration Act) who was resident in Canada throughout the 18 month period preceding that time, or
was determined before that time by the Convention Refugee Determination Division of the Immigration and Refugee Board to be a Convention refugee,
and for the purposes of this definition,
where the qualified dependant resides with the dependant’s female parent, the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent,
the presumption referred to in paragraph (f) does not apply in circumstances set out in regulations made by the Governor in Council on the recommendation of the Minister of Human Resources Development, and
factors to be considered in determining what constitutes care and upbringing may be set out in regulations made by the Governor in Council on the recommendation of the Minister of Human Resources Development.
[5] For the purposes of paragraphs (g) and (h) of the definition of “eligible individual” in section 122.6 of the Act, sections 6301 and 6302 of Part LXIII of the Income Tax Regulation (“Regulations”), provide the following:
NON-APPLICATION OF PRESUMPTION
6301. (1) For the purposes of paragraph (g) of the definition “eligible individual” in section 122.6 of the Act, the presumption referred to in paragraph (f) of that definition does not apply in the circumstances where
the female parent of the qualified dependant declares in writing to the Minister of National Health and Welfare that the male parent, with whom she resides, is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of each of the qualified dependants who reside with both parents;
the female parent is a qualified dependant of an eligible individual and each of them files a notice with the Minister of National Health and Welfare under subsection 122.62(1) of the Act in respect of the same qualified dependant;
there is more than one female parent of the qualified dependant who resides with the qualified dependant and each female parent files a notice with the Minister of National Health and Welfare under subsection 122.62(1) of the Act in respect of the qualified dependant; or
more than one notice is filed with the Minister of National Health and Welfare under subsection 122.62(1) of the Act in respect of the same qualified dependant who resides with each of the persons filing the notices where such persons live at different locations.
(2) For greater certainty, a person who files a notice referred to in paragraph (1)(b), (c) or (d) includes a person who is not required under subsection 122.62(3) of the Act to file such a notice and a person for whom the requirement to file such a notice has been waived by the Minister of National Health and Welfare under subsection 122.62(5) of the Act.
FACTORS
6302. For the purposes of paragraph (h) of the definition “eligible individual” in section 122.6 of the Act, the following factors are to be considered in determining what constitutes care and upbringing of a qualified dependant:
the supervision of the daily activities and needs of the qualified dependant;
the maintenance of a secure environment in which the qualified dependant resides;
the arrangement of, and transportation to, medical care at regular intervals and as required for the qualified dependant;
the arrangement of, participation in, and transportation to, educational, recreational, athletic or similar activities in respect of the qualified dependant;
the attendance to the needs of the qualified dependant when the qualified dependant is ill or otherwise in need of the attendance of another person;
the attendance to the hygienic needs of the qualified dependant on a regular basis;
the provision, generally, of guidance and companionship to the qualified dependant; and
the existence of a court order in respect of the qualified dependant that is valid in the jurisdiction in which the qualified dependant resides.
[6] We are only concerned here with the condition set forth in paragraph (h) of the definition of “eligible individual”, namely, that the parent of the qualified dependant must be the one “who primarily fulfils the responsibility for the care and upbringing of the qualified dependant”.
[7] I must assume that paragraph 6301(1)(c) or (d) is applicable in the circumstances as both Mrs. Wendy O’Brien and the appellant are claiming the child tax benefit for the periods in issue. The presumption referred to in paragraph (f) of the definition of “eligible individual” in section 122.6 of the Act is thus not applicable and the factors set forth in section 6302 of the Regulations must be considered.
[8] The appellant, Mr. James Klimas and Mrs. O’Brien testified.
[9] At the beginning of the first period in issue, Mrs. O’Brien and Mr. James Klimas had already been separated for a number of years. Mr. Klimas had been living in Montréal since 1992 and Mrs. O’Brien was still living in Deux-Montagnes in the common domicile. On March 26, 1996, following a petition for divorce filed by Mrs. O’Brien, a consent to judgment on interim measures was signed and entered in the Superior Court (Family Division) (Exhibit A-1). Pursuant to that consent to judgment, Mr. Klimas was to pay the arrears on the hypothecary loan on the common domicile as well as the amounts of arrears owed to Hydro-Québec; he was also to pay for the house insurance. Despite that undertaking, none of this was done. The house was eventually lost and the bills were left unpaid. Mr. Klimas explained that during the period from January 1 to December 31, 1996 he was on leave of absence from his employment and was trying to start a business.
[10] Mrs. O’Brien and Mr. Klimas’ children, Courtney and Justin were born on August 28, 1988 and June 10, 1991 respectively. In April 1996, Courtney was 7½ years old and Justin almost 5 years old.
[11] As to custody, the consent to judgment on interim measures, referred to above, simply provides that the parties will have joint custody of both children without giving specifics. According to Mrs. O’Brien, at that time, Courtney was in school at Deux-Montagnes and resided with her during the week. She would generally be with her father on weekends and during school holidays. Mrs. O’Brien said that Justin was registered in pre school for three half days a week and that he would generally reside with her when he was in school but that there were no fixed arrangements in that respect. He would have spent most weekends with his father.
[12] Mr. Klimas returned to Deux-Montagnes in July 1996. My understanding is that it was only then that the joint custody agreed to with Mrs. O’Brien was implemented. She would have the children from Sunday noon to Wednesday noon and he would have them from Wednesday noon to Sunday noon. However, as Mrs. O’Brien felt that she did not have enough time with the children, it was agreed before the judgment of divorce, which is dated September 24, 1996 and was to take effect on the thirty-first day after that date, that she would take the children with her on Saturday at 5 o’clock, instead of Sunday noon, every second week. However, the judgment itself is silent as to this agreement, saying merely that the parties are granted joint custody (Exhibit A-2).
[13] In her testimony, Mrs. O’Brien stated that the agreement was adhered to but for the fact that on school days, beginning September 1996, the children would return to their father’s residence Wednesday at 4 o’clock instead of noon. The children’s residence schedule presented to Revenue Canada by Mr. Klimas does not mention the return at 4 o’clock instead of noon on Wednesdays (Exhibit A-4). Mr. Klimas did not mention it in court either. However, in the questionnaire filed with Revenue Canada, Mr Klimas states that Justin was only with him from 5 o’clock Wednesdays (Exhibit A-5).
[14] Mr. Klimas said that he and the appellant are both working at the same place, Batshaw Youth and Family Centre, but on different weekly schedules so that either he or the appellant would be with the children when they had custody. In 1996, Mr. Klimas took a one-year leave of absence from his employment to start a business, but was unsuccessful. He then returned to his former employment. He explained that this was why he did not pay the $180 a week alimony that he had agreed to pay Mrs. O’Brien, who had had to apply for welfare during that period. He said, however, that he paid arrears in 1997. According to Mrs. O’Brien, failure to pay also occurred in 1998 but the arrears were eventually paid.
[15] During 1996 and up to June 1997, Mrs. O’Brien provided day-care for two children. In July and August 1997 she worked for 6 weeks and finally got a full-time job in September of that year. She works from 9 o’clock to 5 o’clock, or from 9 o’clock to 4 o’clock when she has the children with her. Her parents would supervise her children at home until her return and she would personally attend to the children’s homework.
[16] As far as school is concerned, Mrs. O’Brien states that she was the one who registered Justin for the first year he attended. Courtney had already been registered. Mrs. O’Brien claims to have been present at all the parent-teacher meetings and that she was the only one of the three present at the end of the 1995-1996 school year. However, she said the appellant was also present during the 1996-1997 and 1997-1998 school years. As for Mr. Klimas, he said he was only present once during those years. Mrs. O’Brien also made school bus arrangements as she lives far enough from the school for the children to use the bus. The appellant and Mr. Klimas live within walking distance of the school.
[17] The arrangement of, and transportation to, medical and dental care seem to have been shared by both parents. Mrs. O’Brien stated that she would generally make the yearly appointment with the doctor, although she recognized that Mr. Klimas also did it on occasion. Either she or Mr. Klimas would take the children to the appointment, depending on the day of the appointment. The appellant was also attending at the doctor’s or the dentist’s office with the children. The dentist’s fees were covered under insurance held by Mr. Klimas.
[18] Although the evidence is unclear as to certain details, it would seem that recreational and sports activities were arranged and paid for by both Mrs. O’Brien and Mr. Klimas depending on the activity. Mrs. O’Brien claimed to have registered Justin in soccer for the first time in 1996 and that she took him to his games on Monday. Mr. Klimas also took him on occasion on Mondays. On Wednesdays, Mr. Klimas took him. Mr. Klimas’ testimony is different from Mrs. O’Brien’s on this point. He claims to have registered Justin for soccer for the first time in 1994. According to him, Mrs. O’Brien attended games only once or twice during the season, that is from May to August 1996. Mrs. O’Brien said that she also registered Courtney for swimming that year and took her to that activity twice a week throughout the summer.
[19] During the fall and winter of 1996-1997, Mrs. O’Brien enrolled Courtney in Brownies. Mr. Klimas paid part of the enrolment fees. According to Mrs. O’Brien, Justin was registered in a Math-Science class by his father, and possibly with a basketball team as well, during that year. Mrs. O’Brien also enrolled him in Beavers but that did not last long because, if I understand her testimony correctly, she was not allowed to attend the meetings.
[20] Mrs. O’Brien said that during the summer of 1997 Courtney was involved in no special activities, while Justin was registered in soccer. Mrs. O’Brien would generally attend his games on Mondays.
[21] During the fall and winter of 1997-1998, according to Mrs. O’Brien, Justin was registered, by his father, in basketball and also in either a Math-Science or a karate class. Courtney was enrolled by Mrs. O’Brien in Girl Guides, which she attended until May, taking part in a special camp in the fall, which Mrs. O’Brien also attended. Mr. Klimas disputes with that, claiming that Courtney left the Girl Guides after three weeks.
[22] During the summers of 1996 and 1997, Mr. Klimas or the appellant acted as coach of the soccer team. During the 1996-1997 school year, Mrs. O’Brien was involved with the Brownies as a substitute leader. During the 1997-1998 school year, she was involved with the Girl Guides as a leader.
[23] Mr. Klimas claims to have taken care of all transportation to and from Mrs. O’Brien’s home until December 1997. Mrs. O’Brien does not have a car and relied on her parents when transportation was required for the children, for example, to go to the doctor or the dentist.
[24] Mrs. O’Brien lives in a duplex, which she describes as safe, clear and clean, where each child has his own room. According to her, other activities with her children would have included viewing rented movies, reading, taking walks and visiting family and friends. Mrs. O’Brien says that her relationship with the children is normal and that they all get along well.
[25] For her part, the appellant is claiming that the children travel more with her and Mr. Klimas than they do with Mrs. O’Brien. She mentioned activities such as going to the city parade, visiting Old Montréal and skating in Ottawa.
[26] The questionnaires filed with Revenue Canada by both Mr. Klimas and Mrs. O’Brien (Exhibit A-5) provide more details on certain aspects, although those details are not always entirely consistent with the evidence given in Court.
[27] Despite the fact that a number of years have passed since their separation and divorce, there is definitely still some acrimony between Mrs. O’Brien and Mr. Klimas and the testimony they provided in defending their position with regard to entitlement to the child tax benefit might well be somewhat tainted.
[28] I am faced here with two parties, the mother of the children on the one hand and their father (and his new spouse) on the other, who undoubtedly did their best to give their utmost attention to the care of the children and to be involved in their upbringing in a difficult joint custody situation. Each provided attention, each participated, and each got involved in his or her own way and according to his or her own means.
[29] Where the evidence taken as a whole does not really tip the scales one way or another in any significant manner, one would want to find a solution that would be in line with the wish of the parties to share the custody of their children on an equal basis, which is what was essentially agreed to and adhered to in the present case.
[30] Unfortunately, except where there is an agreement between the interested parties to share the child tax benefit on a six-month rotational basis, an arrangement accepted as an administrative practice by Revenue Canada, it is not possible to divide the benefit between the parents, as was decided by the Federal Court of Appeal in Canada v. Marshall, [1996] F.C.J. No. 431.
[31] In light of the factors to be considered, which are based on care, attention, participation and involvement, and in view of the evidence adduced in the present case, I must conclude that the appellant has brought insufficient evidence to demonstrate, on a balance of probabilities, that she has satisfied the condition set out in paragraph (b) of the definition of “eligible individual” in section 122.6 of the Act, namely that she was, during the periods in issue, the parent who primarily fulfilled the responsibility for the care and upbringing of the two children.
[32] Therefore, the appeals are dismissed.
Signed at Ottawa, Canada, this 24th day of January 2000.
"P.R. Dussault"
J.T.C.C.