Tax Court of Canada Judgments

Date: 20020122

Docket: 2001-972-IT-I

BETWEEN:

AYODEJI HARRIS-EZE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasonsfor Judgment

Margeson, J.T.C.C.

[1]            The Minister of National Revenue ("Minister") reassessed the Appellant for the 1997 and 1998 taxation years, notices of which were dated October 18, 1999 and August 9, 1999. The Minister disallowed professional dues claimed by the Appellant in the amount of $4,226 for the 1997 taxation year and moving expenses in the amount of $1,570 for the 1998 taxation year.

[2]            The Minister allowed the Appellant a federal foreign tax credit in respect of taxes paid to the United States ("U.S.") for the 1996, 1997 and 1998 taxation years respectively.

[3]            In so reassessing the Appellant, the Minister assumed that at all material times the Appellant was a factual resident of Canada, pursuant to Article IV of the Canada-U.S. Income Tax Convention (1980) and subsection 250(3) of the Income Tax Act ("Act") and was liable to pay taxes on his income from sources inside and outside Canada, in accordance with subsections 2(1), 2(2) and section 3 of the Act.

[4]            The Appellant took the position that he was a U.S. resident and a citizen of Nigeria at all relevant times and a non-resident of Canada for the 1996, 1997 and 1998 taxation years.

Evidence

[5]            The Appellant testified that he was originally from Nigeria in Africa. He left there at the age of 31 and came to Canada in 1992. He went to Saskatoon, Saskatchewan as a research scholar. Before that he had lived only in Nigeria.

[6]            He attended school in Nigeria, had a residency there and practiced as a medical doctor for nine months. His father was still located in Nigeria, and he had brothers and sisters located there as well. He had land and property in Nigeria. Only eight groups in his village were English and a local language was spoken since childhood.

[7]            Medical science was under-developed and frustrating for a professional like himself. He wanted to do research where technology was available to him. In Nigeria there was very little intensive care available. He wanted to be able to take the necessary steps to save lives instead of feeling helpless to do more.

[8]            He saw advertisements for fellowships in Canada, the U.S. and Australia. He received such a scholarship at the University of Saskatoon which was referred to as The Morehead Scholarship. His preferred specialty was that of "irreversible lung diseases" and he worked in that specialty while in Nigeria. He practiced in a group of six practitioners.

[9]            His intention was to build up an impressive curriculum vitae to be able to proceed to a subspecialty in lung care diseases. He had not developed this subspecialty before he came to Canada. He then sent out applications to Canada for fellowships in this subspecialty but was unsuccessful so he applied to the U.S. Basically the same applications were sent to the U.S. and to Canada but he received several offers in the U.S.

[10]          In Saskatoon he lived on Main Street and rented an apartment. With respect to his status while in Saskatoon he said:

We were in transit. I had no home or investment. We did not develop a circle of friends there, except with several Nigerian and one other black person (Dr. Jean Tillon, a dentist). I used his address to forward mail to me after I went to the U.S. He had agreed to it. We would receive two to three mails through him there over a period of two or three years. I never lived there and never discussed or considered living at that address.

[11]          He decided to go to Albert Einstein College of Medicine University in Long Island, New York in a Jewish Hospital Residency program. There he studied and developed his skills in his chosen specialty. He said that the 1996, 1997 and 1998 taxation years were in issue. These were the years of his residency in the U.S.

[12]          He left Saskatoon on July 23, 1995. In Long Island, he lived in a leased residential apartment at 263-10 74th Avenue, Apt. C5 in Glen Oaks, New York. This was close to the hospital where he was studying and working. He lived there with his wife and children up until June 24, 1998.

[13]          He had no other residence while in Long Island.

[14]          In New York there were many Nigerians including classmates that he knew from Nigeria. He and his wife also established religious contacts in both the protestant and catholic religions. They went to mass on Saturday and to the Pentecostal service on Sunday. They attended meetings and bible study.

[15]          In Saskatoon they went only to the catholic church. He did not consider that they were as outgoing while living in Saskatoon as they were in New York. Saskatoon was smaller and the weather was too cold.

[16]          In New York you could obtain any kind of food you wanted including African food but you could not do so in Saskatoon. He also joined the American Respirology Society in the U.S. which was a professional society. His residency was in internal medicine with an interest in respirology. He completed an internal medicine specialty in New York and then had to go on to a subspecialty in respirology.

[17]          He was referred to Exhibit A-1 at Tab 32, which was his 1995 tax return in the U.S. They were told that they had to file a non-resident return since they had lived in Canada up until July. They had to pay tax in Canada on all of their world income but did not have to pay tax in the U.S.

[18]          Tab 33 of the same exhibit was his income tax return while in the U.S. for 1996. It was different from the 1995 return. A tax accountant told him that in 1996 they were deemed residents of the U.S. and could not use the non-resident form.

[19]          In 1996 they spent the whole year in the U.S. He did not recall if they visited Canada or not that year. He declared his whole world income in the U.S. in 1996 and claimed a refund.

[20]          At Tab 34, line 10 he indicated that he claimed a refund of $717 for the previous year in his 1997 income tax return in the U.S. He said that Canada Customs and Revenue Agency ("C.C.R.A.") had concurred with him in declaring all of his income in the U.S. His refund was confirmed in the report of tax overpayment located at the same tab.

[21]          Tab 35 was a copy of the joint return filed in 1998 in the U.S. with his wife. He reported his world income and claimed a refund of $278. He encountered no problems in the U.S. in filing his returns in this matter.

[22]          He obtained a New York State driver's licence which was issued on the 29th of April 1997. He had no other driver's licence at this time and had held a Canadian driver's licence up until April when he was stopped for using the Saskatchewan driver's licence. He was given two weeks to obtain a New York State licence. He had to turn in his Saskatchewan driver's licence at that time. In the year 1998 he obtained another Saskatchewan driver's licence before he left New York.

[23]          He was asked why he left New York and he said that he still had the desire to do a subspecialty in his chosen field. He had to apply a year in advance. He applied in Canada and the U.S. and was interviewed in both countries.

[24]          The procedure in the U.S. was to list the hospitals where you preferred to go to and then they list the candidates. If they match then you go to that place. He went to Henry Ford Hospital in Detroit. He worked in the intensive care unit there. He handled calls with respect to his specialty, respiratory medicine, and was able to do work in that regard. He could not do this in Canada because he had not received any training in Canada in that specialty. He stuck to the U.S. program.

[25]          He was referred to paragraph 8(j) of the Reply to Notice of Appeal ("Reply") and he disagreed with this presumption. This was a presumption that the Appellant did not contact the U.S. Immigration authorities or any other U.S. authority to indicate his intention to stay in the U.S. after completion of his three-year educational tenure. This purportedly resulted from an interview with C.C.R.A. on December 18, 2000.

[26]          With respect to his moving to Detroit he said that when you are matched to only one choice you must go there, even though he was interviewed at Yale, Boston, Pittsburgh, Philadelphia and Detroit.

[27]          He said: "When I left Saskatoon I knew that it would be virtually impossible to return to Canada but I left the door open. I was just going for the program and hoping for something to come up."

[28]          At the time of the hearing he lived in Windsor, Ontario. This occurrence was accidental. He did not want to live in Detroit as he found that it was too dangerous but he could not go to any other area in the U.S. because of the match. He talked to the hospital authorities about living in Windsor and commuting back and forth. He admitted that if he had matched elsewhere, he could not have lived in Canada.

[29]          He was referred to a document at Tab 39 for the year 1999. He described this as a document that permits persons trained outside of the U.S. to be admitted into a program in the U.S. It gives you the right to live in the U.S. even though the document itself refers to it being a "Certificate of Eligibility for Exchange Visitor (J-1) Status". This refuted paragraph 8(j) of the Reply. His career goal has everything to do with where he lives. To go to the U.S. to train one must receive an undertaking from your country that you will be allowed to return there to work in your field. Canada declined him this undertaking. He obtained the undertaking from Nigeria so that he could go to the U.S. for three years. Then he obtained a waiver which allowed him to practice in the U.S. in a subspecialty field.

[30]          He identified the Notice of Action found at Tab 44 which was a petition for a non-immigrant worker. This was dated February 21, 2001 which indicated the approval. He also referred to the Notice of Action at Tab 46 dated June 21, 2000 which he received in spite of the fact that he had undertaken to leave after three years. The employer had to apply for it.

[31]          He intends to apply for his green card in the U.S. because he cannot continue to commute from Windsor to his place of work. He had a bank account in Saskatoon which he left intact so that he could repay some of his loans. He did not use it for any other purpose. He had no access to any living accommodations in Saskatoon. He left a few pieces of furniture there but there were no sentimental ties to Saskatchewan. He ultimately gave away his small pieces of furniture to the Salvation Army in Saskatoon. He had no clothing there.

[32]          He was disappointed with Canada's position in regard to practising in Canada. The rules are different in Canada. He was referred to Exhibit A-1, Tab 28, which was referred to as a "Determination of Residency Status (Leaving Canada)", which he filled out on May 1, 1996 referable to the 1995 taxation year. Tab 29 contained a similar questionnaire for his wife for the 1995 taxation year. They both filled them out. At paragraph 7 of this questionnaire he indicated that he would keep (by storing or renting out) his furniture, furnishings, appliances, utensils, etc. in Canada. Further, he agreed that he would have personal possessions in Canada, such as clothing (essentially wardrobe), personal items, pets, etc. Further, he said that he would keep his Canadian driver's licence. He renewed his Saskatchewan driver's licence before leaving Long Island.

[33]          He was very busy and there was a chance that he might return to Canada. His wife kept her New York State driver's licence. She still had some life insurance in Canada. He received two credit cards in Canada but cancelled both of these. He was unable to obtain a car licence plate in the U.S. due to the fact that his automobile did not meet New York ignition standards. His schedule did not allow him to sell the vehicle in Canada so he kept it.

[34]          He thought that he visited Canada in 1997 and 1998, both of which were weekend visits to Montreal and Niagara for about three to four days. He went to Toronto to take the examinations. His wife came to Montreal with him to obtain the Canada Child Tax Benefit payment. C.C.R.A. determined that they were factual residents of Canada and were required to pay tax in Canada and they did for the year 1995.

[35]          He referred to Tab 31, the Determination of Residency Status form, which was his wife's questionnaire which the Appellant completed on March 1, 1997. Tab 31 was completed the same date. His wife's form indicated that it was for the 1995 taxation year but it should have been for the 1996 taxation year. He just discovered this mistake in the date a week before the hearing when discussing the matter with the solicitor.

[36]          He identified the document at Tab 27 for the year 1995 which he said was correct. He took the position that he was a permanent resident of Canada, with a returning resident's permit currently residing in the U.S. for a graduate and medical education. He sent this in with his 1995 income tax return. It was true. Likewise, he identified a letter from C.C.R.A. directed to himself dated April 26, 1996 indicating that the Child Tax Benefit issue was under review and that they would stop issuing Child Tax Benefit payments until they had completed their review.

[37]          Tabs 24 and 25 confirmed their position that they were factual residents of Canada for 1995. He also identified documents between Tabs 19 and 23 referable to his request for the waiver of interest and the cancellation of interest by C.C.R.A. as a result thereof.

[38]          Tab 17 was a letter from C.C.R.A. dated September 30, 1997 indicating that C.C.R.A.'s position was that they had not maintained significant residential ties with Canada and as a result they were considered to be non-residents while they were living outside of Canada. This was referable to the year 1996. He agreed with this position.

[39]          He referred again to Tab 35 which was his and his wife's 1998 income tax returns filed in the U.S. He identified the letter at Tab 15, which he sent to C.C.R.A. with respect to residency status for 1996 and 1997. He said that this was in response to a letter from C.C.R.A. dated August 28, 1998, found at Tab 14, but they were still talking about his residential status for the years 1994 and 1995. The letter at Tab 13 was a letter from C.C.R.A. indicating that they were residents of Canada while living in the U.S. from July 23, 1995 to June 26, 1998. By this time, the Appellant was back in Canada.

[40]          He was told to file a return in Canada for 1996, 1997 and 1998 and they believed that they had to do so due to the troubles that they had previously. They subsequently filed objections to the reassessments for the years 1996, 1997 and 1998.

[41]          He referred to the document at Tab 2 which was a letter from C.C.R.A. dated April 26, 2000. This letter was referable to his 1995 and 1996 tax returns indicating that his appeal was successfully upheld and that he was determined to be a factual resident of Canada. However, he said that he did not appeal against the residential status in Canada for the years 1994 and 1995. He had personal telephone conversations with C.C.R.A. and he was even contacted by collection agencies after the appeals were filed. He also suffered difficulty in proceeding with his house sale due to these problems with C.C.R.A.

[42]          In cross-examination the witness admitted that when he left Canada there was an intention for him to return after his studies were over. This position changed after he went to the U.S. The reality of his returning became much less during his sojourn in the U.S. Even before he left it was only a possibility that he might return because he had received negative letters with respect to the possibilities in Canada. He was asked to obtain a letter regarding the possibility of returning to his home country Nigeria, in order for him to continue in the U.S.

[43]          He kept an open mind about returning to Canada. He requested an assurance from Health Canada that if he returned to Canada he would have an opportunity here. The letters that he received were negative. He wrote six to seven letters in total and received negative responses to all of them. He did admit that he did not have the letters in Court because he did not think it was necessary to bring them.

[44]          He explained that it was his position that they were entitled to Child Tax Benefit credit refunds and Goods and Services Tax ("GST") rebates in 1996 from Canada because they declared taxes for 1995 in Canada and the refunds were based upon that year. In 1997 he did not consider that they were entitled but in 1998, after they returned, they became eligible for rebates again.

[45]          He denied that during his three-year stay in the U.S. that he considered himself to be a factual resident of Canada. He denied making representations in 1996, 1997 or 1998 that during those years he was a factual resident of Canada. He again denied that after returning to Canada in 1998 that he considered that he was a factual resident of Canada during the years in issue.

[46]          It was suggested to him that he only wanted to consider himself a resident of the U.S. in 1996, 1997 and 1998 after he returned to Canada and was assessed but he denied this. He denied having received advice that it would be more advantageous for him to be considered to be a resident of the U.S. during the period in issue.

[47]          He came to Canada in April of 1992. When he arrived in Canada there were no immediate plans to return to Nigeria. This opportunity did not exist as of this date, either.

[48]          He originally arrived in Canada under a visitor's visa with a work permit to do what he came here for, which was to work at the University of Saskatchewan. If he had wanted to go elsewhere in Canada he needed to receive a new work permit. He earned approximately $31,000 to $32,000 in 1993 and 1994.

[49]          He did admit that at some point in time he wanted to make his stay in Canada more permanent and he applied for landed immigrant status in 1994. This was granted in November of 1994. He did not want to stay in Canada at any cost, particularly if his family was going to be destitute because of his inability to find work. It would enhance his status to be granted landed immigrant status but it was not settled that he would stay in Canada. Further, landed immigrant status would enhance his ability to obtain a position in Canada.

[50]          When in Saskatoon he lived in an apartment, collaborated with other doctors, attended conferences in and outside of Canada. He met with others in his field at those conferences. When he was in the U.S. he kept contact with those he had worked with in Canada but that did not require him to come back to Canada.

[51]          He had been a member of the Canadian Thoracic Society in 1993 and 1994 but could not say with respect to 1995. He did not pay his dues in that year. There were no benefits for him to remain in it when he was in the U.S. He joined the United States Society. This was more international.

[52]          He was questioned with respect to his social ties while in Saskatchewan and he said he had colleagues there for work purposes but did not have many contacts socially. He did remember having Christmas dinner with one of his colleagues the first year. He also had a fifth or sixth cousin in Canada. He spoke to one former classmate in Newfoundland. He did befriend a Saskatoon dentist, who was earlier referred to, but he said: "It was a father/son type of thing."

[53]          He denied that he had used the dentist's mailing address in Saskatoon because he had intended to come back to Canada. He had to have an address and used the address as "care of". He did have some intentions of returning. As far as mail was concerned, it only went to that address for the first three months. He needed a Canadian address to apply for a returning visitors' permit. The Saskatchewan licence also went to that address. That was about all.

[54]          He took out insurance in the U.S. because he did not think that he was covered in Saskatchewan after six months. He attended the Roman Catholic Church in Saskatoon and his wife went with him. The youngest son was born in Canada. He believed that he was in transit and did not buy a home in Saskatoon. His dreams were dashed day after day. He did not take out a mortgage even though he would have qualified for one. He went to the U.S. in July of 1995.

[55]          The residency program in the U.S. was three years. The program was not operated by an agency of the U.S. Government. You are selected apart from the immigration issue. He reiterated that residents of Canada could attend the program that he was in if they had a letter from Health Canada. However, there were no residents of Canada there because Health Canada would not give the appropriate letter. He considered Nigeria as his place of permanent residence. He did not consider Canada as his place of permanent residence or as one of them. He listed Nigeria as his permanent legal residence for all the years 1996, 1997 and 1998 even though he had not visited there for nine years due to time and financial restraints. He needed to have a sponsor country and Canada refrained from being that. He had no documents to support this contention.

[56]          He was referred to Exhibit R-1, Tab 38, which was the letter of no objection that he obtained from Nigeria. This letter indicated that the Appellant had filed a written assurance with the Government of Nigeria that he would return to Nigeria upon completion of his training in the U.S. and intended to enter the practice of medicine in the specialty for which training was being sought. This enabled him to obtain the training that he sought. He would have gone back to Nigeria if the opportunities were not in Canada or the U.S.

[57]          He identified his T1 general return for 1995 for Canada which he filed from the U.S. and signed it. He listed the province or territory of residence as being Saskatchewan and New York. He was asked why he obtained the returning resident permit dated July 17, 1995 and he said that he wanted to keep it open to him. He wanted to keep his opportunities open. He did not intend to come back.

[58]          He was referred to the Certificate of Eligibility for Exchange Visitor (J-1) Status and it was suggested to him that if his home country needed this specialty then he had to return. He said that he never had to apply for a waiver of the two-year physical presence requirement as set out in paragraph 2(1)(a) of the Act because he went into another program right away. It was possible to stay in a program for two years and then go back or obtain a waiver. The waiver was just an application to work in an under-serviced area and then it would be granted. If the waiver was not granted and there were no opportunities in Canada he would go back to Nigeria. He could only apply upon completion of the program. There was no uncertainty about this because he knew that he was going to be accepted into the subspecialty.

[59]          He was referred to Tab 2 of Exhibit A-1, a letter from C.C.R.A. dated April 26, 2000, with respect to his 1995 and 1996 taxation years and his status for those years and he disagreed with the statement that claimed he was contending to be a factual resident of Canada for those years. He wanted to file in Canada for income tax purposes for the year 1995 on his total world income because he was a resident of Canada for more than six months and there was some hope that he might return.

[60]          In 1996 he made a request for a determination of residence status because his advisors in the U.S. told him that he could not file as a non-resident since he had been there for some period of time and C.C.R.A. had agreed with this position. However, for the years 1996, 1997 and 1998 he did not consider himself to be a factual resident of Canada.

[61]          He did not make an application for determination of residence status in 1997 and 1998 because there was no change in his status from 1996. He had a telephone conversation with the Internal Revenue Services with respect to the forms that he should use and he filed as a resident of the U.S. for the years in issue. They asked him how long he was in the U.S., where his family was located and where he lived. Further, his tax accountant told him that he could not file in the U.S. as a non-resident. He was told by Canada that he had to send in a questionnaire.

[62]          He was asked why he would have asked Canada to make a determination in 1996. He said that he may have made two applications in 1996 but C.C.R.A. could not find one of them. The first request was probably in January or February. He had been advised that he was a U.S. resident at that time. He was referred to Tabs 1 and 28 of Exhibit A-1, a questionnaire completed by himself on May 1, 1996. He was again referred to question 7 in this questionnaire and he was asked whether or not those answers were correct. He said that he did not know when he disposed of those articles in 1996. He had a licence in 1996 and part of 1997 up to March or April. He believed that he could renew his driver's licence in 1996.

[63]          He did not contact the authorities with respect to his provincial medical coverage because he thought that it would automatically elapse. He did not recall answering yes to the question of whether or not he had any affiliation with professional groups or the church. He kept a bank account and he now said that he had one loan (credit card) in Ontario. He used his credit card for interviews, for children's expenses and for the car loan which was registered in Saskatchewan. He kept his plates in 1996, 1997 and 1998 because he could not change them for New York plates. He did renew his plate sticker. He had life insurance in Canada and the U.S. in 1995 and 1996. He was required to have life insurance in the U.S.

[64]          With respect to question 10(i) of Exhibit R-1, Tab 10, he said that he had chequing accounts in the U.S. With respect to the Child Tax Benefit credits payments, he received them in 1996 based on his 1995 return but this was not so for 1997.

[65]          He made two visits to Canada in 1996, one to Toronto in 1997 and another visit to Canada in 1998 when he found out that he was coming to Windsor. With respect to the J-1 application for the visa, it must be made yearly. If you are still in the program it is guaranteed. With respect to the determination of residence status application, he made a second request on March 1, 1997 because things had changed. He considered himself to be a non-resident of Canada at that time. With respect to the questionnaire at Tab 30 of Exhibit A-1 at question 4, he said that the reason why he was leaving Canada should have been for professional improvement rather than studying or conducting research as was indicated. He had loan payments in 1997 as the interest was lower in Canada than in the U.S. In 1998 the loan may have been paid off or perhaps a small amount was outstanding.

[66]          He was referred to the residency status and determination dated July 24, 1996, which indicated that he had maintained significant residential ties with Canada and was considered to be a factual resident of Canada while living outside of Canada. However, this was relative to the 1995 taxation year and he was satisfied with that determination. If it were with respect to the 1996, 1997 and 1998 taxation years he would have been displeased. The letter at Tab 6 of Exhibit A-1 was relative to his 1995 taxation year when he asked C.C.R.A. to apply his wife's Child Tax Benefit credit to her account. In the document at Tab 7 he was asking for a remission of interest.

[67]          In the 1996 taxation year he was deemed to be a non-resident of Canada. He was pleased with that decision. He sent two questionnaires to C.C.R.A. with respect to the 1996 taxation year. He referred to Exhibit R-1 at Tab 12, in which he was indicating that he was a non-resident of Canada in 1996 and indicating his intention to return to Canada when he finished his current graduate education. However, his position was that this was effective only if he was able to obtain the proper opportunity in Canada. He had intentions of returning if he was able to fulfill his needs.

[68]          At Exhibit R-1, Tab 13, he was referred to a letter from C.C.R.A. dated September 30, 1997, indicating that in 1996 he was declared to be a non-resident of Canada. He was pleased with that decision. He returned to Canada at the conclusion of his medical residency and he has been in Canada ever since. He understood that in order to be entitled to the Child Tax Benefit credit and the GST rebate he must make a declaration of tax for the previous year.

[69]          His visits to Toronto were for the completion of examinations, once in 1996 and once in 1997. He was exploring the possibility of coming back to Canada. In 1997 he went to Montreal on one occasion regarding his wife's account and in 1996 he did not know why he went.

[70]          He identified the income statement that he had received from the Long Island Jewish Medical Center for $15,694.34. The federal income tax in the U.S. that was withheld was in the amount of $1,119.52. This was for the 1995 taxation year. He also identified the statement of income from the Long Island Jewish Medical Center for the year 1996 showing tax withheld but no other deductions. In 1996 he filed as a resident of the U.S.

[71]          He was asked why no deductions were withheld for social security or medical or anything of that nature. He did not know why there were no deductions. He inquired about it but did not receive an answer. People at the Long Island Jewish Medical Center believed that it was an error. He did have social security and medicare tax withheld at the Henry Ford Health Centre. It was not considered to be peculiar by him that as a resident of the U.S. they were not withholding social security and medical deductions.

[72]          On July 1, 1998, he went into the subspecialty that he was seeking. He referred to the letters of no objection received from the Federal Ministry of Health of Nigeria at Tabs 37 and 38 of Exhibit R-1 and again said that these were required for him to be able to attend in his subspecialty. He had been through this process in Canada before and had been refused by Health Canada so he did not write them again for subsequent years. He returned to Canada in June 1998 and entered the program at the Henry Ford Centre in July 1998.

[73]          He then identified his (J-1) Status certificate shown at Tabs 39 and 40. The matching at Henry Ford may have come out in March of 1998. It takes him about 20 to 25 minutes to commute from Windsor to the Henry Ford Centre. He discussed a waiver for the year 1999. He applied for all waivers. The Attorney General of the U.S. gives the final affirmation. The purpose of the waiver is to allow a person to proceed with his green card application. He is now working in the U.S. In order to obtain the waiver, you must have a job, that is why he applied to Michigan. He is still in the U.S. fulfilling the conditions of the waiver. His wife believes that it is better to stay in Canada now since they have moved so many times and they require stability for the children.

[74]          He was again questioned about his apartment in Long Island and he said that his residence there was only temporary. Then he said, "I could not say that my decision was not to stay in Long Island for a very long time. I might have because I had a guaranteed position for my specialty there". He was told that he needed a New York State driver's licence because he was a New York resident. He does not have the letters that he received in that regard. He did not think that the letters regarding the registration of the automobile were relevant and he did not keep them. Detroit had a ready supply of African food stuffs. He was asked why he obtained a Saskatchewan driver's licence in 1998 when he was going to leave New York. He said: "Because the door was still open."

[75]          The Respondent called Janet Curysek who was an appeals officer from Windsor. In evidence given under affirmation she said that she was employed by the C.C.R.A. and has been so employed for 24 years. She was assigned the present file at the objection stage in November of the year 2000 regarding the factual residency for 1996, 1997 and 1998 of the Appellant. She went back to the base years 1994 and 1995 with respect to GST rebates and Child Tax Benefit credit. As a result, it was determined that he was a factual resident of Canada for the taxation years 1996, 1997 and 1998.

[76]          She was referred to Exhibit R-1, Tab 14, which was a diagram or chart with respect to GST credits for the 1994 and 1995 base years, based on tax returns due on April 30, 1995 and April 30, 1996. She was referred to the residency status letter sent to the Appellant by the International Tax Service Office in Ottawa on September 30, 1997. This was referable to the 1996 taxation year and stated that the Appellant was a non-resident in 1996 while outside Canada. It further indicated that he was not entitled to receive benefits but he was still subject to "a non-resident withholding tax" on certain types of Canadian source income that he received such as interest, dividends and pension income. In making the determination the department must consider all of the facts.

[77]          With respect to the first request in 1996, the Appellant completed two questionnaires with respect to the 1995 taxation year as shown in Exhibit R-1 at Tab 3. These questionnaires were used as tools to assist the officer making the decision. She processed the objections filed by the Appellant. She talked to him about his residency status on December 10, 2000. This was a personal interview. They discussed his intentions. He said that the U.S. only allows him to study in the U.S. and that he must leave after three years. He did not have to return to the U.S. He obtained a returning residence permit for Canada and he indicated that when he left he would return if there was a job waiting for him. He said that he would not be returning to Nigeria because of the quality of life and the fact that he could not practice his specialty there. He returned to Canada three years after he left.

[78]          These are the factors she considered in making her decision that he was a factual resident of Canada during the years in question. She asked him why he was residing in Canada now and working in the U.S. He said that his wife did not want to live in the U.S.

Argument on behalf of the Appellant

[79]          In argument, counsel for the Appellant urged the Court to find that during the years 1996, 1997 and 1998 Dr. Harris-Eze was not a factual resident of Canada. He acknowledged that he had to be a factual resident somewhere and this should be based upon the common law tests of the U.S.

[80]          He admitted that these are unusual circumstances in light of the fact that the Appellant did not have the same background such as some other person who might be living in Windsor and who had gone to the U.S. for some period of time. Such a person might have left close family ties in Canada whereas this did not apply to the Appellant who did not develop close or substantial ties to Saskatchewan when he lived there. He was only there for a short period of time and he did not have many ties to sever.

[81]          The only ties that he had to Saskatchewan were his driver's licence, even though that was severed for a time, he had a bank account for loan payments and a returning resident's permit together with a conditional intention to return to Canada. This conditional intention was made clear in statements he made to C.C.R.A. in December 2000. He opined that the evidence of Dr. Harris-Eze was very credible and the Court should find that whatever ties he did have in Saskatchewan, which were very few, were almost severed but the only ties that remained were a couple of visits and those were not even to Saskatchewan.

[82]          With respect to New York, there were ties to his culture, his former classmates and friends and he had substantial employment there. While in New York he formed the intention to stay in the U.S. and learned through his peer group that there would be opportunities for him to stay in the U.S. The only reason he came back to Canada was purely by chance. He was matched in the matching program and ended up coming to Detroit and deciding to commute from Windsor, Ontario because it was considered by himself and his wife to be preferable to living in Detroit. The decision was actually made by the wife and not him. In any event the decision was not made to go back and live in Saskatoon.

[83]          Further, there was no evidence that there was any intention or suggestion of coming to Windsor any time before mid-1998. Therefore, on the common law test, looking at the ties that he had to Canada and the U.S., including bank accounts and credit cards, one should find that he was a factual resident of New York during the years in question. He had no other home, he lived in New York, his family lived in New York with him and there was no other place where he could go or where he could not be refused entry (with the exception of Nigeria). His return to Nigeria might have been at the end of the day, otherwise when he went home, he went to New York because that is where his immediate family was, his wife and children. That was his home. Nigeria is the home of his extended family, where his mother and father were.

[84]          There was enough evidence for the Court to find that according to the common law objective test, the Appellant was a factual resident of the U.S. in the years in question. There is also the fact that he declared himself to be such a resident on his income tax returns for the years in question, which was based upon advice that he had received. He also received advice from the IRS in the U.S. through the hot-line, which is another factor to be considered. This is consistent with his own position that he considered himself to be a factual resident of the U.S. during the years in question.

[85]          The Appellant has never really done anything inconsistent with that intention other than when he came back to Canada in 1999. At that time he filed income tax returns after he and his wife had undergone a considerable amount of hassle with C.C.R.A. He had received conflicting decisions in respect to his residency. His returns were not filed during the years in question. In any event, he filed objections and that is why the case is before the Court.

[86]          Therefore, even though filing tax returns is clearly a factor to be considered, and clearly a tie to be considered, those tax returns that were filed in 1999 in Canada, based on Canadian residency, were filed after the period in question and there was a clear explanation for that, which does not support the finding that he considered himself to be a factual resident of Canada during the years in question. In any event, he filed objections and that is why the case is before the Court.

[87]          Counsel then said that his alternative position was that if the Court agrees with the Respondent's position that the Appellant was a factual resident of Canada, then it is necessary to go to the Canada-U.S. Tax Treaty -- Canada-U.S. Income Tax Convention (1980), ("Treaty"). Under the Treaty, the only possible way that the Respondent can be successful is to urge that the Appellant was a factual resident for all of those years in Canada only and therefore could not avail himself of the benefit of the Treaty. Counsel referred to Article IV of the Treaty with respect to residence. Paragraph 1 provides:

1. For the purposes of this Convention, the term "resident" of a Contracting State means any person that, under the laws of that State, is liable to tax therein by reason of that person's domicile, residence, citizenship, place of management, place of incorporation or any other criterion of a similar nature, ... .

Therefore, the Appellant could be found, under the Treaty, to be a factual resident of the U.S. The Court should not find that he was a factual resident of both countries, although that is the only position open to the Respondent.

[88]          Counsel then dealt with the term "permanent residence" which he said was not a tax term but an immigration term. Whether or not someone is a permanent resident for the purpose of immigration, which the Appellant may have been for Canada, is a factor which the Court must consider in deciding whether or not he was a resident for tax purposes, but it is not determinative and is not binding. It is just one of the factors. In the case at bar the Appellant did apply for landed immigrant status so this factor must be considered.

[89]          If you are a landed immigrant then you are, for income tax purposes, a permanent resident. It is conceded that the Appellant was a permanent resident of both countries for immigration purposes and this factor must be considered in determining whether or not he was a factual resident for tax purposes but this is only one of many factors to be considered.

[90]          The issue of "permanent residency" in Canada pursuant to his landed immigrant status ties in to the returning resident's permit. An explanation was given, and it is extremely credible, that that status was only sought in the hope that there would be employment available, and, ironically enough, the employment became available on the border. However, that intention was a conditional intention.

[91]          His intention to return to Canada was only to leave the door open, that he needed, to protect his landed immigrant status. That is why he obtained the returning resident's permit. In the event that a person, a landed immigrant, remains out of Canada for a certain number of days, one loses his landed immigrant status unless one obtains a returning resident's permit. It is submitted that a returning resident's permit would not be granted unless the person has lost his status of residence. It is conceded that the returning resident's permit itself is not determinative of the fact that he became a factual resident of Canada but it is a factor that must be looked at. The fact that he applied for a returning resident permit cuts both ways. In this case it may be neutral.

[92]          In the alternative, counsel argued that if the Court should find that the Appellant was not a factual resident of the U.S. during the years in question, then the Appellant is still entitled to take advantage of the Treaty. There are two factors which must be satisfied in order for the Appellant to get into the Treaty, (1) his residence, together with the liability to pay tax on his world-wide income. Apart from any argument by the Respondent that the Appellant was not liable to tax on his world-wide income in the U.S. during the years in question, it was the Appellant's submission that if you are a resident then it is automatic that you are liable on your world-wide income in any event.

[93]          Counsel referred back to paragraph 1 and argued that the term "residence" therein means factual residence. However, there are other criterion listed and in particular "any other criterion of a similar nature". The Appellant falls into this category so that even if the Court should find that he was not a factual resident of the U.S., the phrase "any other criterion of a similar nature" includes, for U.S. purposes, an election under the Code to be treated as a U.S. resident. By filing the income tax return the Appellant made the election to be treated as a U.S. resident under the Code. Therefore, even if he was not a factual resident, he still falls under the protection of the Treaty by virtue of his election to file those tax returns and be treated as a U.S. resident.

[94]          In the event that the Court should find that the Appellant was a factual resident of both, or a factual resident of Canada only, the Court still has to resort to the "tie-breaker rules". Paragraph 2 of Article IV of the Treaty, under the term "legislation", states as follows:

2.       Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

(a) He shall be deemed to be a resident of the Contracting State in            which he has a permanent home available to him; if he has a      permanent home available to him in both States or in neither          State, he shall be deemed to be a resident of the Contracting      State with which his personal and economic relations are                 closer (centre of vital interests);

The only state in which the Appellant had a permanent home was in the U.S. He was in an apartment there for a three-year period and he furnished the apartment and his family lived there. That was his permanent home. There was no home of any kind available to him in Canada and therefore the Appellant is successful under this heading. In any event, if he is not successful under that then you consider where he has his personal economic relations. He had no economic relations other than making some loans in Canada and his personal relations were very clearly closer in the U.S. than they were in Canada. Under either of those tests, the Appellant succeeds.

[95]          Counsel further submitted that if after considering all of the above tests, the Court still cannot decide, the very last step is to have the competent authorities of the contracting states decide the question. In the event that the Canada-Japan Treaty is considered as an aid, it is to be noted that that Treaty is very much different in its wording from the Canada-U.S. Treaty. This is the very first step in the Canada-Japan Treaty but it is graphically different from the Canada-U.S. Treaty.

[96]          Counsel concluded that the appeal should be allowed with costs and the matter referred back to the Minister for reassessment and reconsideration based upon the Court's findings that the Appellant was a factual resident of the U.S. during the years in question.

Argument on behalf of the Respondent

[97]          Counsel for the Respondent submitted that in order for the "Treaty" to apply, the Court would have to find that during the years in issue the Appellant was a resident of the U.S. under the laws of the U.S. and not under Canadian common law. If the Court should find that the Appellant was a resident of the U.S. under the laws of the U.S. then Article IV of the "Treaty" triggers the tie-breaker rules, because the "Treaty" is designed to avoid double-taxation. However, if the Appellant was a dual resident, the Court would have to find that the Appellant was liable for tax in the U.S. on the basis of residency, citizenship, domicile or otherwise as stated in the "Treaty" under Article IV of paragraph 1, to obtain the relief he seeks.

[98]          Counsel referred to the case of Fisher v. The Queen, 95 DTC 840 (T.C.C.), in which Judge Bowman summarized the leading cases with respect to the question of "ordinarily resident" in Canada, which counsel equated essentially to the term "factual resident" as referred to in argument of the Appellant.

[99]          The question of residency is a question of fact according to the jurisprudence. The term "factual residence" may be derived from usage by C.C.R.A. However, both parties agree that the term of the common law, is "ordinary residence". Judge Bowman in this case at page 844 said:

. . . the factors which have been found in those cases to be material in determining the pure question of fact of fiscal residence are as valid in his case as in theirs. While the list does not purport to be exhaustive, material factors include:

a. past and present habits of life;

b. regularily and length of visits in the jurisdiction asserting      residence;

c. ties within that jurisdiction;

d. ties elsewhere;

e. permanence or otherwise of purposes of stay abroad.

            The matter of ties within the jurisdiction asserting residence and elsewhere runs the gamut of an individual's connections and commitments: property and investment, employment, family, business, cultural and social are examples, again not purporting to be exhaustive. Not all factors will necessarily be material to every case. They must be considered in the light of the basic premises that everyone must have a fiscal residence somewhere and that it is quite possible for an individual to be simultaneously resident in more than one place for tax purposes.

[100]        Further, Judge Bowman said as follows:

            While ultimately the tests that have been developed by the courts follow a common pattern, it would seem that individual residency cases fall into three broad categories:

(a) cases where a person who has theretofore been ordinarily    resident in Canada leaves, takes up residence elsewhere and     alleges that he or she has so severed the relationship with                Canada that he or she is no longer resident here;

(b) cases where a person, ordinarily resident in another country,               acquires a residence and other ties in Canada. There the             question is whether that person has become "ordinarily resident" in Canada;

(c) cases where a Canadian resident leaves Canada and severs his           or her connection with this country so that he or she is not a     Canadian resident, and then reacquires ties here. The question there is whether that person has resumed residence here.

            The tests may ultimately be the same, but the type of evidence necessary to establish the relinquishment of Canadian residency would normally be somewhat different from that necessary to establish that the taxpayer has or has not acquired or resumed it.

[101]        The case at bar falls under category (a) and the Respondent's position is that the Appellant was "ordinarily resident" in Canada, left Canada and is now alleging that he has taken up residence in the U.S. and alleges that he has so severed the relationship with Canada that he is no longer a resident here.

[102]        Judge Bowman at page 845 went on to say:

            Taking into account the guiding factors enunciated in other courts, and in light of the evidence as a whole, can it be said that the appellant was "ordinarily resident" in Canada in 1987 and 1988? To use the words of Rand, J. in Thomson, can it be said that he had "in mind and fact settle[d] into or maintain[ed] or centralize[d] his ordinary mode of living with its accessories in social relations, interests and conveniences" in Canada to such a degree that his visits here went beyond mere "stays" or "visits" and became part of the normal and customary mode of life of a person who regarded and treated Canada as his true place of habitual abode?

Counsel further referred to the decision in Glow v. The Queen, 92 DTC 6467 (F.C.T.D.), where, Rouleau J. at paragraph 16 speaking as to the type of evidence that one would have to produce to show that the individual has severed his ties with Canada, says:

            I agree with the plaintiff's submissions that it was not necessary for Mr. Glow to cancel his credit cards and bank accounts, roll over his RRSPs, and divest himself of all property (real and personal) in order to satisfy me that he had ceased to be a resident of Canada. See Beament v. Minister of National Revenue, [1952] C.T.C. 327, 52 D.T.C. 1183 (S.C.C.), Griffiths v. The Queen, [1978] C.T.C. 372, 78 D.T.C. 6286 (F.C.T.D.), and The Queen v. Bergelt, [1986] 1 C.T.C. 212, 86 D.T.C. 6063 (F.C.T.D.). I am also satisfied that a long absence from Canada is not necessary in order for a taxpayer to cease to be a Canadian resident, The Queen v. Bergelt, supra. Similarly, the fact that the taxpayer's remuneration for work in a foreign country is deposited in a Canadian bank account is not of itself determinative of the issue of residency; see Marois v. Minister of National Revenue, (unreported), T.C.C. Notwithstanding, he still has to establish that he had no legal ties to Canada. This he has failed to do.

[103]        On that basis counsel submitted that in order for the Court to find that the Appellant was a non-resident of Canada, there would have to be evidence led that he severed his "legal" ties with Canada in the years in question. It was the Crown's submission that in fact he did not, and that the evidence before the Court demonstrated that he had numerous legal ties to Canada such as: he was a landed immigrant in Canada; he had outstanding tax liabilities in Canada; he had outstanding bank loans in Canada; he had insurance policies in Canada and he had bank accounts in Canada. All of these factors demonstrate that he maintained legal ties to Canada in the period in question. Further, he owned a vehicle purchased in Canada with Canadian licence plates. During the years in question he operated that vehicle in the U.S. with the Canadian licence plates and he continued to comply with the renewal requirements of those licence plates.

[104]        He had a car loan and he was indebted on his credit cards at the Royal Bank of Canada. He made some trips to Montreal and Toronto for business purposes and for vacation. The business trips were with respect to writing an examination to qualify him to subspecialize in Canada. These factors are evidence that at the time in question he did not sever his ties to Canada. In addition, there is the question of the returning resident permit.

[105]        The Appellant acquired the returning resident permit and the significance of this document can be seen by an examination of subsection 25(2) of the Immigration Act which states:

            Possession by a person of a valid returning resident permit issued to that person pursuant to the regulations is, in the absence of evidence to the contrary, proof that the person did not leave or remain outside Canada with the intention of abandoning Canada as his place of permanent residence.

Therefore, it is clear that if one were abandoning their ties with Canada they would not obtain a returning resident permit. This rebuts the presumption in subsection 24(2) of the Immigration Act that:

            Where a permanent resident is outside Canada for more than one hundred and eighty-three days in any one twelve month period, that person shall be deemed to have abandoned Canada as his place of permanent residence unless that person satisfies an immigration officer or an adjudicator, as the case may be, that he did not intend to abandon Canada as his place of permanent residence.

[106]        Dr. Harris-Eze's evidence was that he always kept the door open to return to Canada. This was not consistent with someone who was severing their ties with Canada.

[107]        The nature of his stay in the U.S. was also of significance. He went to the U.S. on a Certificate of Eligibility for Exchange Visitor (J-1) Status Visa initially to complete his medical residency program in New York. It must be renewed yearly in order to stay in the country. This visa is issued to foreign medical graduates who are coming to the U.S. to participate in a residency program. The stipulation on the visa is that if the U.S. Government or the home government directly or indirectly contributes financially to the education there, then you are required upon the expiration of the program to return to your home country and you are required to be there for two years before one can make an application in the U.S. to re-enter into that country.

[108]        Essentially, the Appellant testified that at the end of the day Nigeria was his home country and when he arrived in Canada he had no immediate plans to return to Nigeria. However, the immigration rules that regulate the J-1 class visa provide that at the end of a particular period of time, he was under a legal obligation to leave the U.S. At the conclusion of his program he was obligated to return to his home country, yet, he made it clear that he did not want to return to Nigeria, so if he could not receive a waiver in the U.S. then he had to return to Canada. Ultimately, counsel opined that the question is whether or not he had severed his ties to Canada. If he did not, then he was a resident of Canada and that if there is any relief then he has to go to the "Treaty". In order for him to obtain relief there he had to be liable for tax in the U.S. under the authority of The Queen v. Crown Forest Industries Limited et al., 95 DTC 5389 (S.C.C.).

[109]        There was no evidence before the Court that while in the U.S. Dr. Harris-Eze was taxed on his world-wide income. The facts support the finding that he was ordinarily resident in Canada during the years in question and we do not get to the "Treaty" essentially because of the requirement that he be taxed on his world-wide income in order to trigger the "Treaty" and the application of the tie-breaking rules. These requirements have not been met.

[110]        Once the Court is satisfied that he was subject to income tax in the U.S. on his world-wide income then he was a dual resident of both countries and the Court has to rely on the tie-breaking rules to decide where he was liable for tax in the years in question. The appropriate citation would be Article IV, subsection 2(1) earlier referred to.

[111]        Counsel proposed that the majority of the cases in which this issue arises present the factual situations where someone was born in Canada or was living in Canada for many years and then decided to go away perhaps for the purposes of work or study and in those cases there is usually strong evidence that he has severed his ties.

[112]        In the case at bar Dr. Harris-Eze originally entered Canada on a work permit, being a recent immigrant from Nigeria to Canada who was trying to establish himself so that some of the same factors or roots that exist in the other cases do not exist here.

[113]        It was suggested that in the case at bar the factual situation would make it easier for the Appellant to establish that he had severed his ties because he had very few deep roots. Ultimately, counsel agreed with this submission but said that he has not shown that he severed his legal ties with Canada. This is shown by the fact that he still had credit cards in Canada, he had tax liability in Canada, was making application for GST rebates in Canada, had insurance coverage in Canada and for some time had possessions in Canada.

[114]        When the Court pressed counsel with respect to the meaning of the statement by Rouleau J. in Glow, supra, that it would be the duty of the Appellant to establish that he had no "legal ties" to Canada, his position was that he meant that the Appellant had not severed his ties to Canada. This is shown by the various factors, which have already been related which indicated that he still had substantial connections to Canada.

[115]        In essence counsel argued that on the totality of evidence, the Appellant's presence in the U.S. in the years in question was temporary and his ties to Canada, albeit not as deep-rooted as one would expect if somebody resided in Canada for 15 or 20 years, since he was a recent immigrant from Nigeria to Canada, indicate that his intention was to come back to Canada.

[116]        There are a number of references in the evidence to correspondence between the Appellant and the C.C.R.A., where he expressly stated that he would be returning to Canada upon the conclusion of his program and at the end of the day he did return to Canada. This was also referred to by Ms. Ciurysek on that question.

[117]        Counsel also considered it anomalous that when the Appellant received the subspecialization position in Detroit that he would opt to live in Windsor as opposed to Detroit even though he gave an explanation for that. Counsel took this as a further indication that he had not severed his ties with Canada. There was not much evidence as to his roots or ties in the U.S. even though there was some.

[118]        In any event, most of the evidence supports his ties to Canada as well as sharing a continued intent or interest to keep the door open to come back to Canada. One would think that a non-resident of Canada would not be returning to Canada to write examinations to put himself into a position to obtain gainful employment in Canada. Rather, that would suggest someone who was ordinarily a resident of Canada. That should be taken into consideration and given some weight.

[119]        In summary, counsel took the position that on the basis of the evidence, during the years in question, the Appellant was a resident of Canada within the meaning of the Act. Further, the "Treaty" has no application to this case since on the evidence before the Court, in light of the interpretation provided by the Supreme Court of Canada of the triggering provision in the "Treaty", there need be no resort to the tie-breaking rules.

[120]        Counsel referred to Crown Forest Industries Limited et al., supra, in support of his position that the Appellant has not shown that the tie-breaking rules should be considered. In this regard he referred to paragraph 47 of the Crown Forest case, where the Court said:

. . . In this respect, the criteria for determining residence in Article IV.1 involve more than simply being liable to taxation on some portion of income (source liability); they entail being subject to as comprehensive a tax liability as is imposed by a state. In the U.S. and Canada, such comprehensive taxation is taxation on world-wide income.

[121]        In the case at bar the evidence indicates that statements issued to the Appellant in the U.S. did not show any deductions for Canada Pension Plan and Employment Insurance or the equivalent and the notion of comprehensive tax would include those deductions. Those deductions would ordinarily be required of a resident of the U.S.

[122]        However, in response to a question by the Court he did admit that this might have been a mistake at the hospital so he did not pursue that argument.

[123]        Ultimately, counsel proposed that it was the Appellant's duty to show that he was subject to taxation on his world-wide income in the U.S. and he has not done so. The Appellant should have led evidence by U.S. tax experts as to the nature of the tax imposed on an individual in the U.S. who holds a J-1 visa. No such evidence was led. The appeal should be dismissed.

Rebuttal

[124]        In rebuttal, counsel for the Appellant disputed the argument that there was no evidence before the Court that the Appellant was taxable on his world-wide income in the U.S. There were two sources of evidence to this effect. First of all Dr. Harris-Eze was very clear in his direct testimony that he was taxed on his world-wide income in Canada and he used that term in correspondence with C.C.R.A. indicating to them that he was taxed on his world-wide income in Canada during 1995 and he made it clear that he was taxed on his world-wide income in the U.S. in 1996, 1997 and 1998.

[125]        In cross-examination he also brought out another factor that he called the hot-line, and on the hot-line he was told by the people in the U.S. that he was in fact liable for tax on his world-wide income.

[126]        In addition, counsel proposed that the status of world-wide income taxation in the U.S. on residents is in a different category than immigration. He suggested that the Court could take judicial notice of the fact that the U.S. taxes its residents on their world-wide income. The Court can take judicial notice of it because it is so well-known, it is a tax fact and it is identical to the Canadian regime. Residents are taxed on their world-wide income. However, it is not necessary because the Appellant has testified that he was so taxed.

[127]        Counsel argued that there was nothing in the assumptions in the Reply that the Appellant was not taxed on his world-wide income and therefore the burden of proof will be on the Respondent to so establish.

[128]        Counsel for the Respondent had to admit that there was no such assumption in the Reply and there was no evidence that the Minister relied upon such assumption in his assessment.

[129]        On the basis of the facts, counsel distinguished the case of Fisher, supra, and he referred to the relatively large number of ties that the Appellant in that case had to Canada. The type of ties that the Appellant had here were merely to facilitate him making a return trip to Canada without having the hassle of re-opening a new account regarding a new credit card. These ties merely facilitated a return. There was no evidence that the Appellant ever intended to go back to Saskatoon and the trips were not related.

[130]        Further, counsel referred to Glow, supra, where he submitted that the Appellant in that case never did sever the business relationships he established in Canada. He obtained shares in the Company as well as the right to use a trade name and to hold himself out as an associate. He remained an officer and a director of the Company and retained an interest in the activities of the Toronto Branch as well as inquiring as to the contacts that were being made. He had personal ties in Canada, his friends and family and, more particularly, Ms. Dorion who had accompanied him to Nigeria had been a part of his life for over a year before their departure. Those were significant and substantial ties and it is those kinds of ties that you look at and not the ties that have been referred to in the case at bar, which are insignificant.

[131]        Counsel revisited the issue of the J-1 visa and said that the evidence was not conflicting, it was very clear. The Nigerian option had to be an option because if he was unable to obtain employment in Canada and in the U.S., he always intended to return to Nigeria because he had a good position there.

[132]        Counsel emphasized the issue as to whether or not the Appellant had the clear and unambiguous intention to come back to Canada unconditionally. If he did then this might fall into the category of a strong factor but the evidence is, that the real factor that drove the Appellant was his employment, his future career, and that is what would dictate where he would go. On the facts of this case his employment prospects were the single most overriding factor or tie to any place.

[133]        The fact that he might have had an intention to go back to Nigeria if he could not obtain employment and the fact that he might come back to Canada if he could obtain employment, cancel each other out. The real determinative factor is where he could obtain employment. Therefore, the intention to come back to Canada was not in the category of a strong or significant tie.

Analysis and Decision

[134]        At various times throughout the trial, and in the documentation presented as exhibits in this case, several different terms were used including "factual resident" and "ordinary resident" or "ordinarily resident". In subsection 250(3) of the Act, the reference is to "ordinarily resident". Both counsel agreed that the terms were used interchangeably and what we are basically talking about is whether or not the Appellant was ordinarily a resident in Canada, the United States or both during the years in issue.

[135]        There are three possible findings that the Court can make. The first is that the Appellant during the years in question was "an ordinary resident" in Canada and was not "an ordinary resident" in the U.S.; second, that the Appellant was "an ordinary resident" in the U.S. and not "an ordinary resident" in Canada; third, that the Appellant was "an ordinary resident" in Canada and the U.S.

[136]        In the event that the Court finds that the Appellant was "an ordinary resident" in Canada and not in the U.S. then the appeal will have to be dismissed and the Minister's assessment confirmed. In the event that the Court finds that the Appellant was "an ordinary resident" in the U.S. and not in Canada, then the appeal must succeed. If the Court finds that the Appellant was "an ordinary resident" in Canada and the U.S., then the Court must have resort to the "Treaty" and the tie-breaking rules.

[137]        At the outset the Court must make a comment about the evidence of the Appellant. In a case of this nature the evidence of the Appellant is paramount. However, it is not only the avowed intention of the Appellant which is significant but more importantly the actions of the Appellant in spite of what his avowed intention was. Even though significant, the question of intention in this matter is not determinative. The Court must weigh and consider all of the facts as well as take into account the avowed intention of the Appellant as indicated in his evidence.

[138]        In this case the Court finds that the Appellant was an extremely able, intelligent and cooperative witness. His evidence was given in a straightforward manner. He answered the questions as best he could. His answers were not circuitous, evasive or non-responsive. On the contrary, his evidence was direct, inclusive, pointed and given in an open, obliging and informative manner. To say the least, this was a very credible witness.

[139]        There is no doubt in the Court's mind what the intentions of the Appellant were with respect to returning to Canada when he left Saskatoon on July 23, 1995. There was certainly a change in these intentions after he established himself in the U.S. on Long Island in New York State. There is no question in the Court's mind, and this was admitted by the Appellant, that in the taxation year 1995 he considered himself to be an "ordinary resident" in Canada. He filed income tax returns in Canada, he believed that he was entitled to GST rebates in Canada and the Child Tax Benefit credit in Canada. Such credits as he and his wife sought, in accordance with the evidence given by the witness called by the Respondent, were based upon the base years 1994 and 1995 as can be seen from the chart that she constructed in Exhibit R-1, Tab 14. There is no evidence that the Appellant sought such credits or rebates in the years under appeal.

[140]        It is clear that when the Appellant left Canada he left with the intention of studying in the U.S., working there and advancing his career. He decided to go to the U.S. only after he had concluded that he was unable to obtain the advantages in Canada that were available to him in the U.S. He wrote to all universities in Canada in an attempt to obtain a fellowship to further his education, which was subsequently obtained in the U.S. He was unable to obtain one in Canada. That is why he went to the U.S. He received several offers in the U.S. During the time that he was in the U.S. in Long Island, New York he still had the desire to do a further subspecialty and had to apply a year in advance. He applied in Canada and the U.S. and was interviewed in both countries. He was unable to obtain this subspecialty in Canada because he had not received any training in Canada. It is clear that he attempted on several occasions to obtain the necessary commitment from health authorities in Canada and was unsuccessful in doing so. He did not apply year after year because he was satisfied that he would not obtain the necessary consent in Canada after he had been rejected the first year.

[141]        The Court is satisfied that when he left Canada he held out some hope of returning here some day. To this end he kept his automobile licence in Canada, he kept his driver's licence in Canada, he kept his bank account in Canada, he kept insurance in Canada, he kept credit cards in Canada, some indebtedness and for a short period of time some personal assets. He had very few friends in Canada, he had little or no family in Canada, had no real property in Canada and had no profession to return to except that he held out the hope that he might come back to Canada if he were able to practice in his chosen field. He certainly received no confirmation from Canada before he left that this was a secure expectation.

[142]        When he went to the U.S. he did not keep up contact with his church in Canada, to any extent to any persons in Canada or to any extent even to one distant relative that he still had in Canada. By the time the years in question had arrived there were no new indicia of his attachment to Canada and the ones that have been referred to above could more properly be classified as minor or incidental. In spite of these facts, the Court is satisfied that he had some intention of possibly being able to return to Canada some day if he could become employed in his chosen field. To that end he decided to maintain his landed immigrant status, which is a major indicia of his attachment to Canada, and also to maintain his driver's licence in Canada for some time. He applied for a new driver's licence in Saskatchewan before he left Long Island, New York. He also maintained his Saskatchewan car licence for a vehicle which he had bought in Canada and which did not meet the emission standards in Long Island, New York.

[143]        The Court is satisfied that the Appellant has given sufficient and reasonable explanations as to why he maintained these contacts with Canada during the years in question. Even though these are indicia of his attachment or ties to Canada they are not overwhelming, substantial or indeed determinative of his "ordinary" place of residence.

[144]        It is obvious to the Court that when the Appellant and his family arrived in Long Island, New York they immediately began to create very substantial ties to his work, to both churches, to professional associations and more particularly established a residence in Long Island where he resided during the years in question until he obtained his appointment in Detroit and commenced residing again in Canada.

[145]        According to the evidence of the Appellant, which the Court believes, he made many more friends and associates in the U.S. than he ever had in Canada and he was able to satisfy the family's needs for friendship and companionship in the U.S. that he had not been able to do in Canada to any great extent. He was able to satisfy his needs for the type of food that he and his family desired. He showed every intention of continuing to be aggressive in obtaining the training in his chosen subspecialty and to obtain a job that would allow him to study, train and practice in the subspecialty until he was qualified. He told this Court that that was his most important goal and in spite of the fact that in applying to Canada to see whether or not he might be able to receive the training there he was unable to do so. At no time did he waiver in his position that the obtaining of the necessary training in his subspecialty and the availability of a good position in that subspecialty were paramount in deciding where he was going to be "ordinarily resident".

[146]        The Court is aware of the fact that when the Appellant took up residence in Canada in 1999 and commuted to his work in Detroit, that he filed income tax returns in Canada. However, filing these returns was necessitated because of the difficulties he had encountered with C.C.R.A. before, his desire to extricate himself from all of the turmoil that he had encountered in his dealings with C.C.R.A. and his desire to put an end to that. Certainly the actions of C.C.R.A. towards him and their findings were anything but the model of consistency.

[147]        He was at one time told that he was a "factual resident" of the U.S. during the years in question, subsequently this decision was reversed and he was told that he was a "factual resident" of Canada during the years in issue. One could hardly fault him for wondering at some time what his real position was.

[148]        In any event, he ultimately filed the necessary objections to the assessments and declared himself to be an "ordinary resident" of Canada and that is what he was entitled to do.

[149]        The Court does not find it very significant that after returning to Canada in 1999 he proceeded to file returns for the years in question in Canada. This is not conclusive that he either considered himself to be an ordinary resident of Canada during the years in issue nor is it in any way conclusive that he was.

[150]        The Court does not place a great deal of weight on the fact that the Appellant declared some intention of returning some day to Nigeria which he considered to be his permanent place of residence or that he filed J-1 visa applications on the basis of letters received from Nigeria indicating his intention to return to practice in his chosen subspecialty. There was no other way for him to receive the training that he sought in the U.S. unless he was able to obtain those letters from Nigeria. Canada would not provide them for him. There was nothing illegal in what he did nor was this inconsistent with his avowed indication that he might return to Nigeria some day if the work was available for him in his subspecialty or even that he might return to Canada if he could find work in his subspecialty.

[151]        It is obvious that during the years in question subspecialty training and employment in that subspecialty was not available in Canada or Nigeria and he was required to find both of those in the U.S.

[152]        It is remarkably clear from the evidence that during the years 1996, 1997 and 1998 everything that the Appellant did was an attempt to ensure that he was trained in his subspecialty and that he be able to obtain employment in that subspecialty, which obviously could only take place in the U.S. Any indications that he had of possibly going to Nigeria or Canada in the years in question were nothing more than an expression of his aspirations. During those years there was little likelihood that these aspirations could be met.

[153]        Counsel relied upon the provisions of subsections 24(2) and 25(2) of the Immigration Act, in support of his argument that the Appellant did not intend to abandon Canada as his place of permanent residence. He argued that the Appellant applied for and received a returning resident permit when he left Canada pursuant to subsection 25(2) of the Immigration Act. However, the returning resident permit is only proof in the absence of evidence to the contrary. It is rebuttable evidence and the Court is satisfied in the case at bar that the Appellant has rebutted that evidence. The explanation that he gave as to why he obtained the valid returning resident permit when he left Canada is both feasible and acceptable.

[154]        The Court has considered the factors as referred to by Bowman J. in Fisher, supra, and nothing in the factual situation in this case would dictate that reasonable consideration of those factors should weigh against the finding that the Appellant was "ordinarily resident" in Canada during the years in question. In that case Bowman J. referred to the term "factual residence" which this Court concludes is the equivalent of ordinary residence.

[155]        The Court agrees with counsel for the Respondent that the Appellant is probably in Category A of the three categories referred to by Bowman J. in the same case at paragraph 33, that is, that he had been ordinarily resident in Canada, left, took up residence elsewhere and now alleges that he so severed the relationship with Canada that he is no longer resident here. That is the position that the Appellant takes in this case.

[156]        Further, as indicated in paragraph 39 of the same case, the Court asks itself as did Bowman J.: "Taking into account the guiding factors enunciated in other courts, and in light of the evidence as a whole, can it be said that the appellant was "ordinarily resident" in Canada in 1996, 1997 and 1998? To use the words of Rand J. in Thomson, supra, can it be said that he had "in mind and fact settle[d] into or maintain[ed] or centralize[d] his ordinary mode of living with its accessories in social relations, interests and conveniences" in the U.S. to such a degree that his visits there went beyond mere "stays" or "visits" and became part of the normal and customary mode of life of a person who regarded and treated the U.S. as his true place of habitual abode? The Court is satisfied that the answer to such a proposition is "yes".

[157]        Counsel for the Respondent placed a great deal of reliance upon the case of Glow, supra. However, the learned judge's statement at paragraph 16 that "it was not necessary for Mr. Glow to cancel his credit cards and bank accounts, roll over his RRSPs, and divest himself of all property (real and personal) in order to satisfy the Court that he had ceased to be a resident of Canada", would appear to be applicable in the case at bar. Further, as the Court indicated, it is not necessary that a long absence from Canada is necessary in order for a taxpayer to cease to be a Canadian resident.

[158]        The Court has some difficulty in interpreting the learned judge's statement that "he still has to establish that he had no legal ties to Canada. This he has failed to do". The Court asked counsel for the Respondent for its submission as to what the term "legal ties to Canada" meant and at the end of the day the Court must conclude that in the present case, it must consider all of the indicia of the severance of the ties to Canada. It is satisfied on the balance of probabilities that he severed those ties with Canada to such an extent that he was an "ordinary resident" somewhere else. On the basis of all of the evidence before the Court it is satisfied, on the balance of probabilities that the Appellant has established that during the years in question he was an "ordinary resident" in the U.S. and was not an "ordinary resident" in Canada.

[159]        In the event that the Court should be wrong in making this decision, then considering all of the evidence, the Court is satisfied that during the years in issue the Appellant was an "ordinary resident" in Canada and the U.S. and that resort would have to be taken to the "Treaty". In that regard the Court is clearly satisfied that under Article IV, paragraph 1, a determination would have to be made in favour of the Appellant's position that he was a resident of the U.S. during the years in question.

[160]        The principal considerations that lead the Court to this conclusion are found under the wording "or any other criterion". The Court is satisfied that the Appellant filed income tax returns in the U.S. during the years in question, he believed that he had to file income tax returns there, he received advice that he had to file income tax returns there and by act and deed subjected himself to taxation in the U.S. on his world-wide income.

[161]        Further, a reasonable consideration of paragraph 2 leads the Court to conclude that the U.S. was the place where the Appellant during the years in question had a permanent home available to him and his personal and economic relations were most closely related to the U.S. Under these rules, the Appellant was an "ordinary resident" of the U.S.

[162]        The appeals are allowed with costs.

Signed at Ottawa, Canada, this 22nd day of January 2002.

"T.E. Margeson"

J.T.C.C.

COURT FILE NO.:                                                 2001-972(IT)I

STYLE OF CAUSE:                                               Ayodeji Harris-Eze and

Her Majesty the Queen

PLACE OF HEARING:                                         Windsor and London, Ontario

DATE OF HEARING:                                           October 29 and November 2, 2001

REASONS FOR JUDGMENT BY:                      The Hon. Judge T. Margeson

DATE OF JUDGMENT:                                       January 22, 2002

APPEARANCES:

Counsel for the Appellant:                  John R. Mill

Counsels for the Respondent:            Ifeanyichukwu Nwachukwu

COUNSEL OF RECORD:

For the Appellant:                

Name:                John R. Mill

Firm:                  Mill & Associates

                                                                                Barristers & Solicitors

                                                                                606 Devonshire Road

                                                                                Windsor, Ontario N8Y 2L8

For the Respondent:                             Morris Rosenberg

                                                                Deputy Attorney General of Canada

                                                                                Ottawa, Canada

2001-972(IT)I

BETWEEN:

AYODEJI HARRIS-EZE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeals heard on October 29, 2001 at Windsor, Ontario, and on

November 2, 2001 at London, Ontario, by

the Honourable Judge T. Margeson

Appearances

Counsel for the Appellant:                             John R. Mill

Counsel for the Respondent:                         Ifeanyichukwu Nwachukwu

JUDGMENT

          The appeals from the assessments made under the Income Tax Act for the 1996, 1997 and 1998 taxation years are allowed, with costs, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant was an ordinary (factual) resident in the United States during the 1996, 1997 and 1998 taxation years and was therefore not liable to pay taxes in Canada on his world-wide income.

Signed at Ottawa, Canada, this 22nd day of January 2002.

"T.E. Margeson"

J.T.C.C.