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Docket: 2003-3231(IT)I |
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BETWEEN: |
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ERIC SCHREINER, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
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Appeal heard on March 25, 2004 at Saskatoon, Saskatchewan
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Before: The Honourable Justice Georgette Sheridan |
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Appearances: |
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Agent for the Appellant: |
James R. Schemenauer, C.A. |
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Counsel for the Respondent: |
Penny Piper |
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JUDGMENT
The appeal from the assessments made under the Income Tax Act for the 2000, 2001 and 2002 taxation years is allowed and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 18th day of May 2004.
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"G. Sheridan" |
Sheridan, J.
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Citation: 2004TCC314 |
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Date: 20040518 |
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Docket: 2003-3231(IT)I |
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BETWEEN: |
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ERIC SCHREINER, |
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Appellant, |
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And |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Sheridan, J.
[1] This is an appeal from the Minister's determination that for the base years 2000, 2001 and 2002, Mr. Eric Schreiner was not an "eligible individual" within the meaning of section 122.6 of the Income Tax Act. Mr. Schreiner and his former spouse, Nadine Schreiner, are the parents of Jessica, a "qualified dependant" under the section.
[2] This is not the first time this Court has been asked to decide which of the Schreiner parents is an "eligible individual"[1]. In a decision dated February 11, 2003, Ms. Schreiner was found to be an "eligible individual" for the period July, August and September, 2001 of Base Year 2000. Although the Minister called Mr. Schreiner as a witness in that appeal, for reasons not known to this Court, the Minister did not seek to join him as a party under section 174 of the Income Tax Act. Following the decision in that appeal, the Minister ceased the payment of the Child Tax Benefit to Mr. Schreiner and assessed him for the amounts that should have been paid to Ms. Schreiner. Mr. Schreiner objected to this change and it is from the Minister's confirmation that he now appeals. In this appeal, although the Minister called Ms. Schreiner as a witness, he did not seek to join her as a party.
FACTS
[3] Mr. Schreiner works in a watch repair shop in Saskatoon. He and Jessica's mother, Ms. Schreiner, were married in 1983, separated in 1998 and divorced in June 2000. Jessica was born in 1988 and, at the time of this hearing, was 15 years old. Ms. Schreiner, who works part-time at City Hall, was initially granted interim custody of Jessica. In 2001, this was changed when Mr. Schreiner and Ms. Schreiner consented to an Order whereby Jessica would "reside with her father, and spend significant and meaningful amounts of time with her mother". Pursuant to the Order, in every 14-day rotation, Jessica is with her father for 8 days and her mother for 6. Because of the hostility between them, Mr. Schreiner and Ms. Schreiner adhere, with a certain ferocity, to this schedule. Their bitterness towards each other manifested itself at the hearing. As Mr. Schreiner began his testimony, Ms. Schreiner interrupted the proceedings with a loud outburst. Similarly, when Ms. Schreiner was presenting her evidence, Mr. Schreiner reacted to her version of events by grimacing, shaking his head and so on.
[4] On the positive side, both parents demonstrated that they care about and for their daughter, who returns their affection in equal measure. Both have modest incomes, making providing for Jessica's needs a constant struggle. Because Jessica is with each parent about the same amount of time, there is an almost equal burden on each parent's fiscal means. In view of this, the sensible thing would have been for Mr. Schreiner and Ms. Schreiner to apply to have the Child Tax Benefit divided between them. Sharing the Child Tax Benefit is permissible and requires nothing more than the attachment to the parents' applications of their signed written agreement to have the Child Tax Benefit paid for six months to one parent and six months to the other.
ANALYSIS
[5] It is regrettable that the legislation does not permit the Court to impose a distribution between the parents of the Child Tax Benefit[2]. Because it does not, only one of the parents can be an "eligible individual" "at any time". In determining whether a person qualifies as an "eligible individual", the two key issues are whether the child resides with the parent and which of the parents fulfils the role, at any given time, of primary caregiver. In assessing this latter condition, the Court must consider, but is not limited to[3], the factors set out in section 6302 of the Regulations:
For the purposes of paragraph (h) of the definition "eligible individual" in section 122.6 of the Act, the following factors are to be considered in determining what constitutes care and upbringing of a qualified dependant:
(a) the supervision of the daily activities and needs of the qualified dependant;
(b) the maintenance of a secure environment in which the qualified dependant resides;
(c) the arrangement of, and transportation to, medical care at regular intervals and as required for the qualified dependant;
(d) the arrangement of, participation in, and transportation to, educational, recreational, athletic or similar activities in respect of the qualified dependant;
(e) the attendance to the needs of the qualified dependant when the qualified dependant is ill or otherwise in need of the attendance of another person;
(f) the attendance to the hygienic needs of the qualified dependant on a regular basis;
(g) the provision, generally, of guidance and companionship to the qualified dependant; and
(h) the existence of a court order in respect of the qualified dependant that is valid in the jurisdiction in which the qualified dependant resides.
Base Years 2000 and 2001
[6] The dissention between the parents severely limited the reliability of their evidence. Except for their assertions regarding their love for Jessica, I gave little weight to much of what either of them said. Tested against the criteria set out in section 6302, the evidence shows that, for the Base Years 2000 and 2001, each parent played an equal role in the factors set out in section 6302 (a) to (g).
[7] Regarding section 6302(h), however, that equilibrium is disturbed. The Order of the Court of Queen's Bench of Saskatchewan-Family Law Division dated August 22, 2001 is valid in Saskatchewan where Jessica resides, pursuant to its terms, with her father. In each 14-day period, she rotates between her parents' homes. She has a fully equipped bedroom of her own at each residence. Nonetheless, the Court Order speaks of Jessica's "residing with" her father and "spending time with" her mother, a small but important distinction. The Order brought about a change in Jessica's residency which, pursuant to the Interim Custody Order, had been at her mother's home. It also changed the number of days Jessica spent with each parent: the time with her father was increased to 8 days and reduced to 6 with her mother. Jessica's parents jealously guarded the time allocated to them under the Order. In her testimony, Ms. Schreiner expressed her resentment over the guitar lessons Mr. Schreiner had arranged to take with Jessica because they occurred on a Tuesday, "her night" with Jessica. She refused to drive Jessica to these sessions with Mr. Schreiner.
[8] I find that for the Base Years 2000 and 2001, each parent played an equal role in factors (a) to (g) in section 6302. For factor (h), however, I find that the Order requiring Jessica to reside with her father for 8 of every 14 days tips the balance slightly in favour of Mr. Schreiner. Accordingly, I find that he was the "eligible individual" and entitled to receive the Child Tax Benefit for the periods and in the amounts set out below:
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Base Year 2000 July 2001 - September 2001 |
$553.81 |
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Base Year 2000 October 2001- June, 2002 |
$1,661.42 |
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Base Year 2001 July 2002 - June 2003 |
$2,444.00 |
Base Year 2002
[9] For the Base Year 2002, it is my view on the evidence presented that Mr. Schreiner was not the "eligible individual". By that time, Jessica had turned 15 and circumstances had changed regarding the level of her dependency on each parent. While still residing with her father, Jessica was beginning to have a little more reliance on her mother. In particular, the evidence going to section 6302(f) "the hygienic needs of the qualified dependent on a regular basis" and section 6302(g) "the provision, generally, of guidance and companionship, to the qualified dependent" slightly outweigh section 6302(h), the "Court Order" factor, for this period. At her present age, Jessica is quite naturally more disposed to discuss section 6302(f) matters with her mother. As for section 6302(g), Mr. Schreiner pointed out that a teenaged girl is not likely very interested in going clothes shopping or to the beauty salon with her dad in tow. For her part, Ms. Schreiner testified to her spending time with Jessica in such activities and engaging with her daughter in what used to be described, in a less politically correct era, as "girl talk". As was the case for Base Years 2000 and 2001, each parent played an equal role for factors (a) to (e) of section 6302. The difference arises in factors (f) and (g) which tip the balance slightly in favour of Ms. Schreiner as the "eligible individual" for the period July 2003 to October 2003.
[10] The appeal is allowed and the determination is sent back to the Minister for redetermination in accordance with the attached Reasons.
Signed at Ottawa, Canada, this 18th day of May 2004.
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"G. Sheridan" |
Sheridan, J.
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CITATION: |
2004TCC314 |
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COURT FILE NO.: |
2003-3231(IT)I |
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STYLE OF CAUSE: |
Eric Schreiner v. Her Majesty The Queen |
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PLACE OF HEARING: |
Saskatoon, Saskatchewan |
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DATE OF HEARING: |
March 25, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable Justice G. Sheridan |
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DATE OF JUDGMENT: |
May 18, 2004 |
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APPEARANCES: |
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Agent for the Appellant: |
James R. Schemenauer, C.A. |
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Counsel for the Respondent: |
Penny Piper |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |