Tax Court of Canada Judgments

Docket: 2003-602(IT)I

BETWEEN:

S. R.,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Appeal heard on June 20, 2003 at Vancouver, British Columbia

Before: The Honourable Justice Michael J. Bonner
Appearances:
Agent for the Appellant:	Ed Rogers
Counsel for the Respondent:	Victor Caux Brett Marleau (Articling Student)

____________________________________________________________________

JUDGMENT

          It is ordered that the style of cause be amended to substitute S. R. for the name of the Appellant.

          The appeal is dismissed.

Signed at Toronto, Canada, this 2nd day of September 2003.

"Michael J. Bonner"

Bonner, J.

Citation: 2003TCC649

Date: 20030902

Docket: 2003-602(IT)I

BETWEEN:

S. R.,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

Bonner, J.

[1]      This is an appeal from a determination of a deemed overpayment of child tax benefit under s. 122.61 of the Income Tax Act (the "Act") with respect to the years 1998, 1999 and 2000.

[2]      The issue is whether the Appellant, S. R., was, during the period, an "eligible individual" in respect of her son S. F. That turns on whether the Appellant "resided with" her son during the period.[1] The term eligible individual is defined in s. 122.6 of the Act. That provision reads in part:

"eligible individual" in respect of a qualified dependant at any time means a person who at that time

            (a) resides with the qualified dependant,"

[3]      The Minister of National Revenue (the "Minister") acted on the basis of the following findings or assumptions of fact:

"a)         the Appellant and the Spouse have three children, namely, J., born on 1981, S. F., born on 1983 and T., born on 1985, collectively (the "Children");

b)          in 1998, 1999 and 2000 (the "Period") the Appellant lived at Langley, BC;

c)          the Spouse lived at Surrey during the period;

d)          T. resided with the Appellant during the Period;

e)          On December 7, 1995 the Provincial Court of British Columbia ordered (the "Order") by Consent:

(i)          the Appellant and the Spouse had joint custody of the Children;

(ii)         the Appellant and the Spouse had joint guardianship of the Children;

(iii)        the Appellant and the Spouse had liberal and generous access to the Children;

(iv)        J. was to reside with the Spouse; and

(v)         S. F. and T. were to reside with the Appellant;

f)           notwithstanding the Order, S. F. resided with the Spouse during the Period; and"

[4]      The Minister was wrong in relation to the address set out in paragraph b) above for part of the period but the error is not material to the outcome.

[5]      The Appellant contended that S. F. resided with her because he lived with her four days a week and with his father only three days a week. She testified that S. F. lived with her all his life until December 1996 and that he then commenced to go back and forth between her home and that of her former spouse, S. F.'s father.

[6]      The departure from the residence arrangements called for by the Provincial Court Order was the result of an agreement made by the Appellant with her former spouse. That agreement was a response to S. F.'s abuse of his sister T. S. F.'s parents were not prepared to leave him alone in the house with his sister. Accordingly, it was decided that S. F. would go to live with his father and that his elder brother, would go to live with the Appellant and T.

[7]      According to the Appellant S.F. travelled between his father's home and her home following the implementation of the December 1996 arrangements. He had a room, clothing and games in both homes. She said that holidays were shared.

[8]      At the request of Revenue Canada, the Appellant completed and signed a questionnaire on December 31, 2001. The questionnaire stated in part:

"Did you have any children under 19, who at any time from January 1999 to present, did not live with you?

                        Yes    X                       No _____

If yes, state the name and date of birth of each child and the reason for the absence from home in the space below:

FIRST CHILD

Name (first and last)                                          S. F.

Date of birth (year/month/day)               83

Date child left your home (year/month/day) [unclear]

Reason for absence from your home                  Changed boys homes because both sons had emotional problems in homes.

What was or will be the duration of the absence?            Forever

If your child resided or is now residing with another individual or agency who fulfils the responsibility for the care and upbringing of the child, indicate that person's name or agency by completing the area below.                                        Joint Custody

Name                Spouse

Address            Surrey, B.C.

Social insurance number (if available)     ______________

Spouse claims GST for S. F., I claim child tax since 1995."

[9]      In evidence given at the hearing of the appeal, the Appellant attempted to reconcile the apparent conflict between what she said in the questionnaire and her assertion that S. F. lived with her on the average of four days per week and with his father only three days per week even though T., from whom S. F. was to be separated lived with her mother. The Appellant's explanation, in essence, was that it was safe for S.F. to be present in the house with T. if either she or her older son J. was present; that J. was in the house Saturday and Sunday and that she was in the house on her two days off work which fell during midweek. The Appellant explained that S. F. "stayed with her" four days a week although he did not "live with her" four days a week.

[10]     Evidence was given by the Appellant's former spouse. He confirmed that S. F. moved in to live with him in January 1996. He said that S. F. stayed with his mother on weekends and sometimes a couple of days during the week as well. He said that S. F. would spend the evening at his mother's if she was off during the week. S. F. testified that he "visited" his mother when she had time off and on weekends. He said that he spent three days a week with his mother and four days a week with his dad.

[11]     I am inclined to prefer the evidence of S. F. to that of his mother. The Appellant was not an objective witness. She showed a tendency to exaggerate the number of days which S. F. spent at her home. It is clear that S. F. was permitted to visit the Appellant's home only when either she or S.F.'s older brother was present. Although S. F. kept clothes and other possessions and had a place to sleep at his mother's residence the threat which he posed to T. led to the formation of an arrangement which imposed on S. F. the status of a person permitted to visit in his mother's residence in limited circumstances only.

[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.

[13]     For the foregoing reasons, the appeal will be dismissed.

Signed at Toronto, Canada, this 2nd day of September 2003.

"Michael J. Bonner"

Bonner, J.

CITATION:

2003TCC649

COURT FILE NO.:

2003-602(IT)I

STYLE OF CAUSE:

S. R. and H.M.Q.

PLACE OF HEARING:

Vancouver, British Columbia

DATE OF HEARING:

June 20, 2003

REASONS FOR JUDGMENT BY:

The Honourable Justice Michael J. Bonner

DATE OF JUDGMENT:

September 2, 2003

APPEARANCES:

Agent for the Appellant:

Ed Rogers

Counsel for the Respondent:

Victor Caux Brett Marleau (Articling Student)

COUNSEL OF RECORD:

For the Appellant:

Name:

Firm:

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada

---