[OFFICIAL ENGLISH TRANSLATION]
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Docket: 2003-3981(IT)I |
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BETWEEN: |
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SYLVIE BOUTIN, |
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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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Appeals heard on April 6, 2004, at Sherbrooke, Quebec.
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Before: The Honourable Judge Paul Bédard |
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Appearances: |
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Counsel for the Appellant: |
Josée Gosselin |
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Counsel for the Respondent: |
Emmanuelle Faulkner |
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JUDGMENT
The appeals from the assessments made pursuant to the Income Tax Act for the 1999 and 2000 taxation years are 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 19th day of July, 2004.
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Bédard J.
Certified true translation
Colette Beaulne
[OFFICIAL ENGLISH TRANSLATION]
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Citation: 2004TCC290 |
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Date: 20040719 |
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Docket : 2003-3981(IT)I |
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BETWEEN: |
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SYLVIE BOUTIN, |
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Appellant, |
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And |
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HER MAJESTY THE QUEEN, |
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Respondent. |
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Bédard J.
[1] These are appeals under by the informal procedure in respect of the Canada Child Tax Benefit (CCTB) for the 1999 and 2000 base taxation years.
[2] On January 20, 2003, the Minister of National Revenue (the "Minister") served the appellant with notices of reassessment in respect of the CCTB for the 1999 and 2000 base taxation years.
[3] These notices claimed CCTB overpayments from the appellant in the amounts of $2,081.00 and $790.66 in respect of the 1999 and 2000 base taxation years respectively.
[4] In establishing and maintaining the notices of reassessment in respect of the CCTB for the base taxation years at issue, the Minister relied on the following facts set out at paragraph 4 of the Reply to Notice of Appeal:
a) the appellant and Mr. Yvan Gauthier are the parents of a daughter, named Priscilla, born on October 21, 1984;
b) Mr. Yvan Gauthier has been cohabiting with Ms. Évelyne Loiselle since January 1997;
c) Mr. Yvan Gauthier was awarded custody of his daughter Priscilla under a Court judgment dated January 18, 2001, in which the Honourable Judge Guy Daigle approved an agreement, dated that same day, which was reached and signed by the parties, which stated that the child had been living with her father since March 2, 2000.
d) pursuant to approval by a Special Registrar, Ms. Ghislaine Champoux, the appellant obtained legal custody of her daughter Priscilla under the terms of a Court judgment dated December 13, 2001;
e) prior to the period at issue, the appellant was always considered the parent who was primarily responsible for the care and upbringing of her daughter Priscilla;
f) the Minister's review demonstrated the following:
i) the child Priscilla was not living with the appellant during the period at issue;
ii) the documentation provided by the parties, with the aim of demonstrating that they were the parent primarily responsible for the care and upbringing of the child Priscilla, did not argue in favour of the appellant because, among other reasons, several of the documents submitted did not relate to the period at issue;
g) the Minister considered that the appellant was not the parent who was primarily responsible for the care and upbringing of her child Priscilla for the period from July 2000 to October 2001 inclusive, in respect of the 1999 and 2000 base taxation years.
[5] The only question at issue is whether the Minister was wrong in deciding that the appellant was not an eligible individual for the periods at issue.
[6] The definition of "eligible individual" in subsection 122.6 of the Income Tax Act (the "Act") was worded as follows at the time:
"eligible individual"
In respect of a qualified dependant at any time means a person who at that time
(a) resides with the qualified dependant,
(b) is the parent of the qualified dependant who primarily fulfills the responsibility for the care and upbringing of the qualified dependant,
(c) is resident in Canada or, where the person is the cohabiting spouse of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes that time, was resident in Canada in any preceding taxation year,
(d) is not described in paragraph 149(1)(a) or (b), and
(e) is, or whose cohabiting spouse is, a Canadian citizen or a person who
(i) is a permanent resident (within the meaning assigned by the Immigration Act),
(ii) is a visitor in Canada or the holder of a permit in Canada (within the meanings assigned by the Immigration Act) who was resident in Canada throughout the 18 month period preceding that time, or
(iii) was determined before that time under the Immigration Act, or regulations made under that Act, to be a Convention refugee,
and for the purposes of this definition,
(f) where the qualified dependant resides with the dependant's female parent, the parent who primarily fulfills the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent,
(g) the presumption referred to in paragraph (f) does not apply in prescribed circumstances, and
(h) prescribed factors shall be considered in determining what constitutes care and upbringing.
[7] For the application of paragraphs (g) and (h) of the definition of "eligible individual" under section 122.6 of the Act, sections 6301 and 6302 of Part LXIII of the Income Tax Regulations (the "Regulations") stipulate as follows:
NON-APPLICATION OF PRESUMPTION
6301. (1) For the purposes of paragraph (g) of the definition "eligible individual" in section 122.6 of the Act, the presumption referred to in paragraph (f) of that definition does not apply in the circumstances where
a) the female parent of the qualified dependant declares in writing to the Minister that the male parent, with whom she resides, is the parent of the qualified dependant who primarily fulfills the responsibility for the care and upbringing of each of the qualified dependants who reside with both parents;
b) the female parent is a qualified dependant of an eligible individual and each of them files a notice with the Minister under subsection 122.62(1) of the Act in respect of the same qualified dependant;
c) there is more than one female parent of the qualified dependant who resides with the qualified dependant and each female parent files a notice with the Minister under subsection 122.62(1) of the Act in respect of the qualified dependant; or
d) more than one notice is filed with the Minister under subsection 122.62(1) of the Act in respect of the same qualified dependant who resides with each of the persons filing the notices if such persons live at different locations.
(2) For greater certainty, a person who files a notice referred to in paragraph (1)(b), (c) or (d) includes a person who is not required under subsection 122.62(3) of the Act to file such a notice.
FACTORS
6302. 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.
[8] We will concern ourselves here only with the conditions established under paragraphs (a) and (b) of the definition of "eligible individual" in section 122.6 of the Act. The aim is therefore to determine:
i) whether the appellant was residing with her child Priscilla during the period from July 2000 to October 2001 inclusive;
ii) whether the appellant was the parent who was primarily responsible for the care and upbringing of Priscilla during this period.
The facts
[9] The appellant, her ex-husband Mr. Yvan Gauthier, their child Priscilla, the mother and sister of the appellant, and the spouse of Mr. Yvan Gauthier testified.
[10] The evidence revealed that:
(i) from June 2000 on, Priscilla was living full time with her friend, Patrick Labrecque, even though she was 16 years old and even though her father had legal custody of his daughter;
(ii) Priscilla left her friend Patrick in summer 2001; she then spent several days living with her mother and her father before moving in full time with another friend, Rocky;
(iii) at the end of August 2001, she moved back into her father's house; after a few days, the atmosphere between them deteriorated; she then went to reside with her aunt, Nathalie Boutin, for two weeks, and then with Denise St-Pierre, a friend of her mother's;
(iv) in October 2001, Priscilla and the appellant lived with the appellant's mother;
(v) from November 2001 on, the appellant rented an apartment and Priscilla moved in with her.
[11] As Lamarre J. stated in Loyer v. Canada, [2001] T.C.J. No. 71 (Q.L.), at paragraph 14:
To satisfy the definition of "eligible individual", a taxpayer must meet two cumulative conditions: namely residing with the qualified dependant and primarily fulfilling the responsibility for the care and upbringing of the qualified dependant.
[12] The concept of "residing with the qualified dependant" has been defined on many occasions by the case law. The following is a brief review of the case law.
[13] In Eliacin v. Canada, [1993] T.C.J. No. 144 (Q.L.), [1993] 2 C.T.C. 2635 (T.C.C.), at pages 2637 and 2638, Rip J. explained:
It may be said in light of this case law that the words "to reside with" have a broader definition and do not mean to live in a domestic relationship; they only mean to live in the same house as someone else. It also appears that Parliament should have used the word "cohabit" to denote the act of living as husband and wife.
The Act uses only the words "reside with". The word "cohabitation" does not appear in the Act, and is of no relevance to the purposes of this appeal. Thus, the English case law does not help us.
The word "résider" ([TRANSLATION] "reside") is defined by Le Petit Robert 1 as follows:
[TRANSLATION]
"Be established customarily in a place; to have one's residence there... "
In English, The Shorter Oxford English Dictionary defines the word "reside" as:
« ... 2. To dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place.
The word "with", when used in the phrase "the ... spouse ... resided with the taxpayer" in paragraph 63(3)(d), means two things: first, the spouse must reside customarily in the same building as the appellant, and, second, there must be a domestic relationship between the two spouses and their children.
[14] In Burton v. Canada, [1999] T.C.J. No. 833 (Q.L.) and Gibson v. Canada, [1999] T.C.J. No. 834 (Q.L.), Sarchuk J. restated in part this passage from Eliacin and added:[1]
I observe as well Black's Law Dictionary refers to "residence" as "personal presence at some place of abode with no present intention of definite and early removal and with the purpose to remain for an undetermined period, not infrequently, but not necessarily combined with design to stay permanently".
[15] In S.R. v. Canada, [2003] T.C.J. No. 489 (Q.L.), Bonner J. stated at paragraph 12:
The word "reside" with as used in the section 122.6 definition of the term "eligible individual" must be construed in a manner which reflects the purpose of the legislation. That legislation was intended to implement the child tax benefit. That benefit was introduced in 1993 with a view to providing a single nontaxable monthly payment to the custodial parent of a child. That payment was intended to benefit the child by providing funds to the parent who primarily fulfilled the responsibility for the care and upbringing of the child. The threshold test is whether the child resides with the parent. Physical presence of the child as a visitor in the residence of a parent does not satisfy the statutory requirement. The word "resident" as used in s. 122.6 connotes a settled and usual abode. The arrangement made between the Appellant and her former spouse with regard to S.F. recognized a need to separate S.F.'s settled and usual abode from that of T.
This passage was recently restated by O'Connor J. in Bachand v. Canada, [2004] T.C.J. No. 26 (Q.L.), at paragraph 5.
[16] Lastly, in Callwood v. Canada, [2004] T.C.J. No. 95 (Q.L.), at paragraph 10, Woods J. stated:
Although the circumstances that gave rise to this appeal are unfortunate, I cannot agree with the interpretation of the word "reside" that is suggested by Mr. Callwood. The word "reside" generally means "to live in the same house as:" Burton v. R., [2000] 1 C.T.C. 2727 (T.C.C.). In the context of the child tax benefit, this court in other cases has held that residence is to be determined on a monthly basis and that "reside" is to have its ordinary meaning, not an expanded meaning from other statutory definitions that are enacted for different purposes: Armstrong v. R., [1999] 4 C.T.C. 2719 (T.C.C.).
[17] Since the evidence shows that Priscilla resided with friends from July 2000 until the end of September 2001, I am of the opinion that the appellant was not the eligible individual during this period, as the condition set out at paragraph (a) of the definition of "eligible individual" in section 122.6 of the Act was not met. However, since the evidence shows that Priscilla was residing with her mother in October 2001 and that her mother was, during this month, the parent who primarily fulfilled the responsibility for the care and upbringing of Priscilla, I am of the opinion that the appellant was the eligible individual during this period of one month, as the conditions set out at paragraphs (a) and (b) of the definition of "eligible individual" in section 122.6 of the Act were met.
Signed at Ottawa, Canada, this 19th day of July, 2004.
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Bédard J.
Certified true translation
Colette Beaulne
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CITATION: |
2004TCC290 |
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COURT FILE NO.: |
2003-3981(IT)I |
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STYLE OF CAUSE: |
Sylvie Boutin and Her Majesty the Queen |
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PLACE OF HEARING: |
Sherbrooke, Quebec |
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DATE OF HEARING: |
April 6, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable Judge Paul Bédard |
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DATE OF JUDGMENT: |
July 19, 2004 |
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APPEARANCES: |
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For the Appellant: |
Josée Gosselin |
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For the Respondent: |
Emanuelle Faulkner |
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SOLICITOR OF RECORD: |
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For the Appellant: |
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Name: |
Josée Gosselin |
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Firm: |
Lemay, Gladu, Collard Sherbrooke, Quebec |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |