Date: 20010622
Docket: 2000-4283-IT-I
BETWEEN:
CHERYL ANDREA GRANT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hamlyn J.T.C.C.
[1] These are appeals from assessments made under the Income Tax Act (the "Act") in respect of the 1998 and 1999 taxation years.
[2] In computing income for the 1998 and 1999 taxation years, the Appellant did not include the amount of $4,200.00 for each taxation year (the "amounts") received as alimony or other allowances receivable on a periodic basis for child support.
[3] The Minister of National Revenue (the "Minister") assessed the Appellant for the 1998 and 1999 taxation years, as filed, by Notices of Assessment dated March 11, 1999 and March 13, 2000, respectively.
[4] In reassessing the Appellant for the 1998 and 1999 taxation years by Notices of Reassessment dated May 26, 2000, the Minister included the amounts in income.
FACTS
[5] The Appellant and her ex-spouse, Brian Slocum, signed a separation agreement prior to May 1997. In accordance with the terms of the Support Deduction Order of the Ontario Court (General Division) dated May 16, 1994, the Appellant's former spouse was required to pay the Appellant monthly child support in the amount of $350.00 per month beginning May 16, 1994. The Appellant's former spouse paid the amounts to the Appellant in the 1998 and 1999 taxation years in accordance with the Separation Agreement.
JURISPRUDENCE
[6] The Minister simply relies on paragraph 56(1)(b) of the Act and states that the amounts are to be included in income. It reads:
(b) the total of all amounts each of which is an amount determined by the formula
A - (B + C)
where
A is the total of all amounts each of which is a support amount received after 1996 and before the end of the year by the taxpayer from a particular person where the taxpayer and the particular person were living separate and apart at the time the amount was received,
B is the total of all amounts each of which is a child support amount that became receivable by the taxpayer from the particular person under an agreement or order on or after its commencement day and before the end of the year in respect of a period that began on or after its commencement day, and
C is the total of all amounts each of which is a support amount received after 1996 by the taxpayer from the particular person and included in the taxpayer's income for a preceding taxation year; [emphasis added]
[7] Since 1997 the new rules provide that child support payments are no longer taxable or deductible if they are made pursuant to orders or written agreements made after April 30, 1997. Provision is also made for the application of the new rules to orders or written agreements made before April 30, 1997 if they are varied, amended or a joint election is filed after the said date. The relevant provision in this appeal is subsection 56.1(4) and the definitions found therein for the terms "child support amount", "commencement day" and "support amount". They read:
56.1(4) The definitions in this subsection apply in this section and section 56.
...
"child support amount" means any support amount that is not identified in the agreement or order under which it is receivable as being solely for the support of a recipient who is a spouse or former spouse of the payer or who is a parent of a child of whom the payer is a natural parent.
...
"commencement day" at any time of an agreement or order means
(a) where the agreement or order is made after April 1997, the day it is made; and
(b) where the agreement or order is made before May 1997, the day, if any, that is after April 1997 and is the earliest of
(i) the day specified as the commencement day of the agreement or order by the payer and recipient under the agreement or order in a joint election filed with the Minister in prescribed form and manner,
(ii) where the agreement or order is varied after April 1997 to change the child support amounts payable to the recipient, the day on which the first payment of the varied amount is required to be made,
(iii) where a subsequent agreement or other is made after April 1997, the effect of which is to change the total child support amounts payable to the recipient by the payer, the commencement day of the first such subsequent agreement or order, and
(iv) the day specified in the agreement or order, or any variation thereof, as the commencement day of the agreement or order for the purposes of this Act.
"support amount" means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and
(a) the recipient is the spouse or former spouse of the payer, the recipient and payer are living separate and apart because of the breakdown of their marriage and the amount is receivable under an order of a competent tribunal or under a written agreement; or
(b) the payer is a natural parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province.
[8] Paragraph 56(1)(b) of the Act provides the formula for the inclusion of support in the recipient's income. For these purposes, 'A' and 'B' are relevant. 'A' provides that a support amount will be included to the extent that it meets the definition of "support amount" found in subsection 56.1(4). 'B' essentially provides for the exclusion of amounts received as child support after its commencement day. In other words, if a commencement day exists the child support amount is not included in income under paragraph 56(1)(b).
[9] The definition of "commencement day" is the result on the occurrence of specific actions. The relevant situation is found in paragraph (b) of that definition which provides that where the agreement or order is made before May 1997, (which is the case in the present appeal since it is dated May 16, 1994), a commencement day will come into effect on the day specified in the joint election filed with the Minister in prescribed form and manner.
SIGNIFICANT EVIDENCE
[10] The Appellant stated that in 1998 she and her ex-spouse discussed the Election for Child Support Payments under the new Income Tax Act legislation applicable after April 1997. She stated that the ex-spouse signed the election, being Form T1157. The original form was filed as Exhibit R-10. (A copy was filed as Exhibit A-2.) Exhibit R-10 indicates the document execution day was "98-10-01" and the document was received by the Tax Centre, Ottawa on "98-10-13". She also said the Appellant signed it saying the deduction was of no consequence to him.
[11] In an affidavit filed with the Notice of Appeal, the Appellant states that her son witnessed the ex-spouse's signature.
[12] The Appellant's viva voce evidence was that Exhibit R-10 was signed by the ex-spouse sometime before Christmas, in November or December 1998. On this occasion the ex-spouse was helping the son with the raising of the Christmas tree at the Appellant's home. The Appellant's son said he did not witness the Appellant or the ex-spouse signing the document but he does recall the raising of the Christmas tree. The ex-spouse recalls the Christmas tree raising in November or December of 1998 and stated he may have signed only a passport application for the son (Exhibit A-4).
[13] The ex-spouse vehemently denies that he signed the T1157 and specifically said his signature did not appear on the document (Exhibit R-10) and further, at no time did he elect that the child support payments not be deductible.
ANALYSIS
ASSESSMENT OF THE EVIDENCE
[14] The onus is on the Appellant to bring sufficient evidence to show the assessment is incorrect.
[15] She stated the ex-spouse signed the T1157 and she then reviewed several years of an acrimonious relationship between the ex-spouse and herself where she alleged the ex-spouse's behaviour in relation to custody, support and divorce matters should, in her view, lead to a conclusion that the ex-spouse's evidence was less than credible.
[16] The ex-spouse's evidence was clear that he did not sign the document, that on the date he was alleged to have signed the document he was not at the Appellant's home, and he could by his normal pattern of behaviour, account for his presence being elsewhere.
[17] Whether the occasion of the raising of the Christmas tree was the time of the purported signing, October 1, 1998, is not clear. Indeed, from the evidence I conclude the T1157 was not signed by anyone at the time of the Christmas tree raising as the document was received by the C.C.R.A. well before the Christmas season.
[18] The Appellant also admitted she altered the T1157 at least to the degree of printing in the name of the ex-spouse on the face of the document well after the alleged signing. The Appellant's recollection of other matters with respect to details or dates was imprecise. The allegations of trickery, deceit and forgery have created an atmosphere of acrimony, clouding all the evidence.
[19] On a balance of probabilities there is no conclusive evidence for the Court to conclude that the election for child support payments Form T1157 (Exhibit R-10) can be relied upon. The Appellant has not discharged the onus of proof to show the assessment was wrong.
[20] The Appellant, also in evidence, related her difficulties in dealing with the C.C.R.A. and how she alleges they mishandled her file. She states that the C.C.R.A. eventually informed her that they did not believe that the signature on the form was the ex-spouse's and that it had been forged. She was told that her ex-spouse had denied signing the said form. The C.C.R.A. then refused to comment on the nature of the document that the ex-spouse had submitted to be analyzed for comparison purposes by an expert. The Appellant then submitted copies of legal documents with her ex-spouse's signature (i.e. affidavit of land transfer, loan agreement). She contends that the Minister refused to consider the documents she submitted and she was informed that a formal appeal was required.
CHARTER ISSUES, NATURAL JUSTICE
AND MINISTERIAL DISCRETION
[21] The Appellant states that her rights under paragraphs 11(a) and (d) of the Canadian Charter of Rights and Freedoms have been infringed. Firstly, under paragraph 11(a), she states that the Minister failed to disclose the bona fide reason for the reassessment for approximately five months. Secondly, under paragraph 11(d), she states that the Minister arbitrarily imposed a financial penalty despite the existence of a formal objection and further potential for appeal.
[22] Specifically, these purported abuses seem to relate to the Minister and the exercise of his discretion.
[23] The rights guaranteed by section 11 of the Charter are available to persons prosecuted by the state for public offences involving punitive sanctions (i.e. criminal, quasi-criminal and regulatory offences. This Court has determined that section 11 does not apply to assessments made under the Income Tax Act. In Rahey v. Canada, 90 DTC 1053, Bonner J. of this Court found that section 11 of the Charter does not apply to income tax cases because tax assessments and penalties were not offences within the meaning of section 11. As A.C.J. Christie stated in Budyk v. The Queen, [1996] 3 C.T.C. 2328:
Neither the Minister's reassessment of the appellant's liability to tax respecting 1992 and 1993 nor the administrative matters related thereto involved the appellant being charged with an offence. The same is true of the proceedings before this Court.
In relation to the suggestion the Appellant was denied natural justice in the assessment process through the objection stage, the assessment process is an administrative process in a civil context. The Appellant's right to natural justice[1] is preserved in the process of her appeal to this Court. The Tax Court of Canada is an independent tribunal that has no vested interest in either party and hears equally from all sides in terms of evidence and submissions.
[24] As to any request to have this Court review the discretionary power of the Minister in the process of the assessment, the forum for such a review is not the Tax Court of Canada.[2]
DECISION
[25] The appeals are dismissed.
Signed at Ottawa, Canada, this 22nd day of June 2001.
"D. Hamlyn"
J.T.C.C.
COURT FILE NO.: 2000-4283(IT)I
STYLE OF CAUSE: Cheryl Andrea Grant and
Her Majesty the Queen
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: June 13, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge D. Hamlyn
DATE OF JUDGMENT: June 22, 2001
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Sointula Kirkpatrick
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4283(IT)I
BETWEEN:
CHERYL ANDREA GRANT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on June 13, 2001 at Toronto, Ontario, by
the Honourable Judge D. Hamlyn
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Sointula Kirkpatrick
JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1998 and 1999 taxation years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 22nd day of June 2001.
|
"D. Hamlyn" |
J.T.C.C.
[1] Regina v. Rondeau (1974), 5 W.W.R. 664 at page 667:
The cases dealing with the principles of what is called natural justice propound essentially only two fundamental principles, although stated in various ways. The first of these is that no tribunal shall sit in judgment in its own cause and it shall act in good faith. The second of these is encompassed in the Latin phrase audi alteram partem.
[2] Kravetsky v. The Queen, [1999] 1 C.T.C. 2809.