[OFFICIAL ENGLISH TRANSLATION]
2000-3983(IT)I
BETWEEN:
KATHLEEN CLARK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on November 6, 2001, at Québec, Quebec, by
the Honourable Judge Alain Tardif
Appearances
Counsel for the Appellant: Marlène Jacob
Counsel for the Respondent: Alain Gareau
JUDGMENT
The appeal from the determination of child tax benefits made under the Income Tax Act for the 1996, 1997 and 1998 base taxation years is dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 18th day of January 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 23rd day of April 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20020118
Docket: 2000-3983(IT)I
BETWEEN:
KATHLEEN CLARK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal for the 1996, 1997 and 1998 taxation years.
[2] The issues to be decided are as follows:
(a) whether the appellant was the individual eligible to receive the child tax benefit for Nicolas for the 1996, 1997 and 1998 base taxation years;
(b) whether the Minister of National Revenue ("the Minister") was justified in issuing to the appellant the notices of determination of child tax benefit dated May 19, 2000, for the 1996, 1997 and 1998 base taxation years;
(c) whether the Minister was justified in issuing to the appellant the notices of determination of goods and services tax credit dated May 19, 2000, for the 1997 and 1998 base taxation years.
[3] In issuing the notices of determination of child tax benefit dated May 19, 2000, for the 1996, 1997 and 1998 base taxation years and the notices of determination of goods and services tax credit for the 1997 and 1998 base taxation years, the Minister assumed the following facts:
[TRANSLATION]
(a) the appellant and Gérald Tremblay (hereinafter "the former spouse") were married on June 11, 1977;
(b) they have five children: Éric, who was born in June 1978, Nicolas, who was born in October 1981, Marie-Ève, who was born in December 1982, Vanessa, who was born in September 1989, and Maxime, who was born in September 1993;
(c) the appellant and the former spouse stopped living together on July 1, 1994;
(d) a judgment rendered by the Honourable Mr. Justice Frank G. Barakett of the Superior Court of Québec on August 25, 1995, gave the appellant custody of three children: Maxime, Vanessa and Marie-Ève;
(e) the same judgment rendered by the Honourable Mr. Justice Frank G. Barakett of the Superior Court of Québec on August 25, 1995, gave the former spouse custody of two children: Éric and Nicolas;
(f) on January 30, 1996, the Honourable Mr. Justice Gérard Boisvert of the Superior Court of Québec rendered a judgment divorcing the appellant and the former spouse and ratified a corollary relief agreement providing that:
(i) the appellant had custody of three children: Maxime, Vanessa and Marie-Ève;
(ii) the former spouse had custody of two children: Éric and Nicolas;
(g) on April 18, 1996, the Honourable Mr. Justice Frank G. Barakett of the Superior Court of Québec ratified an agreement on a motion for a child custody variation order providing that:
(i) the appellant would have custody of three children, Éric, who was going to be 18 years old in June, Vanessa and Maxime;
(ii) the former spouse would have custody of one child, Nicolas;
(iii) the appellant and the former spouse would have joint custody of Marie-Ève, that is, from 4:00 p.m. on Monday until 8:00 a.m. on Friday for the former spouse and from 8:00 a.m. on Friday until 4:00 p.m. on Monday for the appellant;
(h) on November 16, 1999, the Minister sent the appellant and the former spouse questionnaires for them to fill out;
(i) after reviewing the respective questionnaires filled out by the appellant and the former spouse, the Minister determined that the appellant was not the individual eligible to receive the child tax benefit for Nicolas for the 1996, 1997 and 1998 base taxation years;
(j) the Minister therefore adjusted the CTB for the 1996, 1997 and 1998 base taxation years and the GST credit for the 1997 and 1998 base taxation years accordingly.
[4] The relevant legislative provisions are sections 122.5, 122.51, 122.6 to 122.64, 152 and 248 of the Income Tax Act ("the Act") and sections 6300 and 6302 of the Income Tax Regulations ("the Regulations"), as amended and as they applied for the base taxation years at issue.
[5] To enjoy the rights and benefits provided for in the Act, a person must be the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant. Although the appellant was the mother during the years involved, there is no ambiguity that she did not meet the requirements of the Act. This is moreover very clear from the agreement, which leaves no possible room for doubt.
Corollary relief agreement of January 3, 1996
[TRANSLATION]
7. The applicant shall have custody of Marie-Ève, Vanessa and Maxime;
8. The respondent shall have custody of Éric and Nicolas, although the applicant declares that she is prepared to take custody of them if need be and reserves her recourse in this regard;
. . .
- Support
7. The respondent shall pay the applicant $50 a month in support for her and his children Éric, Marie-Ève, Vanessa and Maxime in accordance with the Act to facilitate the payment of support;
- Access rights
8. Access rights shall be exercised as follows:
- The respondent shall have Vanessa and Maxime, of whom the applicant has custody, every other weekend from 7:00 p.m. on Friday until 7:00 p.m. on Sunday and at least one day each week as mutually agreed by the parties;
- Éric shall see his father once or twice a week when it is convenient for him;
- Nicholas shall see his mother once or twice a week when it is convenient for him;
- During the Christmas season, the parties shall also divide up the Christmas vacation, and the children shall spend one of the two holidays with each of them;
- During the summer, the children shall spend two (2) weeks with their father and shall be registered for Patro activities during their vacation; the choice of weeks of vacation and the children to accompany him shall be made by agreement between the parties;
- Other access rights shall be exercised as mutually agreed by the parties;
Ratification of the agreement by the judgment - April 18, 1996
[TRANSLATION]
. . .
FOR THESE REASONS, the COURT:
RATIFIES and GIVES EFFECT to the agreement duly signed by the parties on April 12, 1996, by amending paragraph 7 and setting the support payable by the respondent to the applicant at $70 a month, the whole in accordance with the Act to facilitate the payment of support;
THE WHOLE with each party paying his or her own costs.
. . .
Agreement of April 12, 1996
[TRANSLATION]
. . .
CUSTODY OF THE CHILDREN
2. The applicant shall have custody of Éric, Vanessa and Maxime;
3. The respondent shall have custody of Nicolas;
4. The parties shall have joint custody of the minor child Marie-Ève, aged 13;
5. The parties shall exercise joint parental authority over their minor child Marie-Ève;
6. Joint custody of Marie-Ève shall be implemented as follows:
- The respondent shall have custody of Marie-Ève from 4:00 p.m. every Monday until 8:00 a.m. on Friday of the same week;
- The applicant shall have custody of Marie-Ève from 8:00 a.m. every Friday until 4:00 p.m. on the following Monday;
. . .
[6] The documentary evidence is very clear and unambiguous as regards responsibility for the care and upbringing of Nicolas. At the start of the hearing, I pointed out that the documentary evidence seemed so conclusive that I considered it impossible to discharge the burden of proof required for the appeal to be well-founded.
[7] Following my remarks, the appellant testified and explained, with emotion, the entire context and the circumstances surrounding the divorce proceedings and the signing of the agreement. She did not submit any fact that could discredit the documentary evidence.
[8] Basically, she asked that the claim resulting from the notices of determination for both the child tax benefit and the goods and services tax credit be cancelled.
[9] The evidence showed that the appellant lived very modestly; her only income came from welfare benefits, which were a bare minimum that no doubt met only part of the basic needs of the family, for which she was solely responsible.
[10] The assessment that led the Minister to claim a few thousand dollars is having such a profound effect on the family budget that it is tragically leading to destabilization.
[11] Obviously, this fact alone makes the appellant's case very deserving of sympathy, especially since the agreement was signed in good faith and ratified by the Honourable Mr. Justice Frank G. Barakett of the Superior Court of Québec.
[12] This is another case in which the support recipient is suffering the difficult and absolutely disastrous consequences of the review of her file, no doubt on the initiative of the support payer, who, for various reasons, decided to seek the application of the Act's provisions that give him a benefit equivalent to the claim made against the other spouse after he waived that benefit by means of an agreement that is nevertheless totally binding on him.
[13] To avoid such a situation, which is often disastrous, the respondent should review her administrative practice to ensure that any person affected by the review of a support file is informed so that he or she can quickly initiate proceedings to mitigate the consequences of his or her particular spouse's about-face when by their own doing the parties themselves entered into an agreement that clearly sets out each party's responsibilities.
[14] An agreement, no matter how clear, has no effect against the Minister if it contains provisions contrary to the Act's provisions; in other words, an agreement that binds the signatories does not bind the Minister against whom it cannot be raised. In the case at bar, although the appellant's former spouse waived rights under the Act through an agreement, this had no effect on the Minister's obligation to pay him all the benefits resulting from the Act. The Minister could not ignore or disregard reality. The appellant's former spouse did indeed have custody of the child in respect of whom the benefits were paid.
[15] Although the consequences may be disastrous for the appellant in balancing her budget, neither the Department of National Revenue nor this Court can disregard the Act's provisions, which are very clear on this point, on humanitarian or fairness grounds.
[16] Allowing the appeal would have the effect of validating obvious non-compliance with the Act's provisions; I have neither the power nor the authority to do so, which is why I must dismiss the appeal.
Signed at Ottawa, Canada, this 18th day of January 2002.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 23rd day of April 2003.
Sophie Debbané, Revisor