Date: 20010510
Docket: 2000-1341-IT-I
BETWEEN:
MICHELINE SIGOUIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered orally from the bench on March 9, 2001, at Montréal, Quebec,
and edited at Ottawa, Ontario, on May 10, 2001)
Lamarre Proulx, J.T.C.C.
[1] This is an appeal under the informal procedure for the 1996 and 1997 taxation years.
[2] The issue is whether, during those years, the appellant was cohabiting with Alain Déragon, her son Elliot's father, in a conjugal relationship.
[3] The appellant stated that for the years at issue her marital status was that of a separated person. For 1996 and 1997, she claimed an equivalent-to-married tax credit of $914.60 ($5,380 x 17%) in respect of her son Elliot and the goods and services tax credit (GSTC). Through a tax benefit notice, the Minister of National Revenue ("the Minister") determined that overpayments had been made for the 1996 base taxation year, and a notice of redetermination was issued for the 1997 base taxation year.
[4] The facts that the Minister took into account for the above-mentioned reassessments and notices are set out as follows in paragraph 13 of the Reply to the Notice of Appeal:
[TRANSLATION]
(a) the appellant and Alain Déragon are the parents of a child, Elliot, who was born on March 19, 1994;
(b) in their respective tax returns for the 1996 and 1997 taxation years, the appellant and Alain Déragon indicated their marital status to be that of separated persons;
(c) a check by the Minister showed that the appellant and Alain Déragon lived at the same address until June 30, 1998;
(d) the Minister was of the view that the appellant and Alain Déragon cohabited in a conjugal relationship during the 1996 and 1997 taxation years, which led to the following changes:
(i) the equivalent-to-married tax credit claimed by the appellant in respect of her son Elliot for the 1996 and 1997 taxation years was disallowed,
(ii) for the 1997 taxation year, the appellant was not eligible for the GST credit once the family net income was taken into account:
1997
appellant 33,661
Alain Déragon 52,485
86,146;
(iii) in calculating the child tax benefits for the 1996 base taxation year, the yearly amount of the benefit went from $734.43 to $409.58 once the family net income was taken into account:
1996
appellant 39,824
Alain Déragon 12,994
52,818
[5] The appellant herself and Mr. Déragon testified for the appellant. Mr. Déragon was not present when the appellant testified. Their testimony did not differ.
[6] The appellant filed an affidavit that she had signed on June 8, 1999. It reads as follows:
[TRANSLATION]
PROVINCE OF QUEBEC
Canada
AFFIDAVIT
I, the undersigned, Micheline Sigouin, administrative assistant, residing at 37 du Blainvillier, Blainville, Quebec J7C 5B1, do hereby declare that:
1. I cohabited in a conjugal relationship with Jacques-Alain Déragon at the above-mentioned address until June 1, 1996, when he received his first paycheque from PageNet Canada Inc.
2. Our conjugal relationship had been shaky since March 1995. We mutually agreed that we would stop living together as soon as Jacques-Alain Déragon had a paying job.
3. Jacques-Alain Déragon started having serious financial problems in March 1995. He was unemployed until May 13, 1996, and went bankrupt in October 1996.
4. Because he had gone bankrupt, Jacques-Alain Déragon could not rent accommodation or borrow any money to find somewhere else to live.
5. On the advice of the trustee in bankruptcy, I drafted a lease so that Jacques-Alain Déragon would not end up on the street without any furniture.
6. Our marital status changed on June 1, 1996, even though we were living at the same address. We each led our own life. We were two single people living as what is commonly referred to as housemates.
7. All of the above facts are true and accurate to the best of my knowledge.
. . .
[7] The testimony was consistent with that description of the facts. At the end of 1995, the appellant and Mr. Déragon stopped living together as de facto spouses. Since Mr. Déragon's financial resources were limited, the appellant agreed that he could live with her as a cotenant. He paid her a monthly amount to cover his share of the expenses associated with the house. He converted the family room into his bedroom and office. They each did their own cooking and had their own car. They each had their own social and family life and their own recreational activities.
Conclusion
[8] This is an appeal in which the application of the legislative provisions involved—those concerning the equivalent-to-married credit for a wholly dependent person, the goods and services tax credits and the child tax benefit—requires that the spouse's income be taken into account.
[9] Paragraph 252(4)(a) of the Income Tax Act ("the Act") provides that the term "spouse" also includes a de facto spouse:
(a) words referring to a spouse at any time of a taxpayer include the person of the opposite sex who cohabits at that time with the taxpayer in a conjugal relationship and
(i) has so cohabited with the taxpayer throughout a 12-month period . . . .
[10] "Spouse" therefore includes the person of the opposite sex who cohabits with the taxpayer in a conjugal relationship throughout a 12-month period. The term "conjugal relationship" is not defined in the Act. I have examined that concept before, in Milot v. Canada, [1995] T.C.J. No. 412:
11 . . . When can two persons be considered as living in a conjugal relationship? This notion has often been studied for the purposes of various statutes. In Quebec, for example, this notion was studied in particular for the application of the Automobile Insurance Act, R.S.Q., c. A-25, s. 2, para. 2, and the Act respecting the Québec Pension Plan, R.S.Q., c. R-9, s. 91. See Les personnes et les familles, Knoppers, Bernard et Shelton, Tome 2, Les éditions Adage, the first chapter of which is entitled "Les familles de fait". It states that cohabitation is fundamental in a conjugal relationship and in conjugal conduct. That conduct may be determined through sexual relations, emotional and intellectual exchange, financial support and common knowledge.
[11] The tests for a conjugal relationship are normally cohabitation and conjugal conduct. That conduct may be determined through sexual relations, emotional and intellectual exchange, financial support and common knowledge.
[12] It is my view that, in appeals such as this one, it must also be taken into account that the provisions involved are intended to financially assist people who have limited means or low incomes. This Court's decision can have an impact on all the monetary assistance that a person has received, and these provisions which were intended to be of assistance may rather become extremely costly for that person where he or she is required to repay the assistance over several years. To dismiss the appeal, I must be thoroughly convinced that the appellant was cohabiting in a conjugal relationship.
[13] It should be noted that in this appeal the appellant asked her alleged spouse to come and testify concerning the type of life they shared in 1996 and 1997. Although he was not present when the appellant testified, his testimony confirmed hers.
[14] As we saw above, cohabitation is an important factor in proving that there is a conjugal relationship. However, it is not the only factor. Common knowledge is another important one. It has to do with behaviour in public: did the people who are alleged to be de facto spouses present themselves as such to their families and friends, or did they each have their own social and family lives?
[15] As regards cohabitation, the evidence in the case at bar showed that there was a kind of home sharing, that there was cohabitation involving two people living separate lives under the same roof. The evidence did not show that there was cohabitation by spouses. The witnesses said that there were no sexual relations or any other type of emotional exchange. The only conversations were the usual discussions about the home and the child. There was financial support in a way, but it was the assistance that one may give someone with whom one has had a significant emotional relationship and who is the father of one's child. It was not the kind of sharing that exists between spouses. As for common knowledge or public behaviour, the two people in question each had their own family and social lives. They had each severed all links with the other's friends and family. It is my view that the indicators are suggestive much more of separate lives than of a conjugal relationship.
[16] I therefore conclude that the appellant and Alain Déragon stopped cohabiting in a conjugal relationship on June 1, 1996, as the appellant stated.
[17] Consequently, the appeal is allowed without costs.
Signed at Ottawa, Canada, this 10th day of May 2001.
|
"Louise Lamarre Proulx" |
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
2000-1341(IT)I
BETWEEN:
MICHELINE SIGOUIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on March 9, 2001, at Montréal, Quebec,
and judgment delivered the same day by
the Honourable Judge Louise Lamarre Proulx
Appearances
Agents for the Appellant: Henri Bernatchez
Vincent Léonard
Counsel for the Respondent: Mounes Ayadi
JUDGMENT
The appeals from the assessments for the 1996 and 1997 taxation years, from the tax benefit notices for the 1996 base taxation year and from the notice of redetermination for the 1997 taxation year, all of which were made or issued under the Income Tax Act, are allowed without costs.
Signed at Ottawa, Canada, this 15th day of March 2001.
|
"Louise Lamarre Proulx" |
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]