Date: 20001121
Docket: 1999-1853-IT-G
BETWEEN:
PAM SANFORD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Mogan J.T.C.C.
[1]
The Appellant gave birth to a baby girl on August 10, 1997 at
Winnipeg, Manitoba. The Appellant applied for the Child Tax
Benefit for her daughter. She received the Child Tax Benefit for
the months of September 1997 to July 1998. On August 20, 1998,
the Minister of National Revenue informed the Appellant (by
special Notice) that she would not receive any further Child Tax
Benefit payments until she provided her spouse's name and
social insurance number. The Appellant has appealed that Notice.
The principal issue in this appeal is whether the Appellant had a
"spouse" in 1997 within the meaning of the Income
Tax Act.
[2]
The facts in this appeal are not in dispute. The basic facts
alleged in the Notice of Appeal were admitted by the Respondent
in the Reply. I will therefore set out below the first nine
paragraphs from the Notice of Appeal all of which are
admitted:
1.
The Appellant is a Canadian citizen. She resides at 735 Wolseley
Avenue, Winnipeg, Manitoba, R3G 1C4.
2.
* On
August 10, 1997, the Appellant gave birth in Winnipeg, Manitoba,
to her daughter, Amy Katherine Sanford ("Amy"). The
Appellant resides with Amy's father. She is not married to
Amy's father according to The Marriage Act, R.S.M.
1987, c.M50, and she is not in a common law marriage with
him.
3.
On August 25, 1997, the Appellant completed a Child Tax Benefit
Application ("the Application") to obtain the Child Tax
Benefit for her daughter. In her Application, she reported her
current marital status as "Single". She submitted the
Application to the Respondent, who received it on or about
September 2, 1997.
4.
On October 20, 1997, the Minister of National Revenue ("the
Minister") wrote the Appellant that her Child Tax Benefit
Application could not be processed because it was
"incomplete". Specifically, the Minister's letter
stated that the Application should be amended to reflect her
"correct marital status" and to provide information
about her "spouse".
5.
An exchange of correspondence followed the Appellant's
receipt of the Minister's October 20, 1997 letter. In this
correspondence, the Appellant contended that her Application was
in fact complete and that the Minister's insistence on her
reporting a spouse in order to obtain the Child Tax Benefit for
Amy was tantamount to requiring her to lie.
6.
On March 20, 1998, the Minister issued the Appellant a Child Tax
Benefit Notice in which her Application was allowed. In the
Notice, the Minister accepted the Appellant's marital status
as reported on her 1996 tax return, that is, as single. The
Notice enclosed a cheque for the Child Tax Benefit covering the
months from September 1997 to March 1998.
7.
The Appellant continued to receive the Child Tax Benefit for Amy
during the months from April 1998 to July 1998.
8.
On July 20, 1998, the Minister issued the Appellant a Canada
Child Tax Benefit Notice which informed her that, if she were to
continue to receive the Child Tax Benefit for the period from
July 1998 to June 1999, the Minister would require her
spouse's name, social insurance number and 1997 tax
return.
9.
On August 20, 1998, the Minister issued the Appellant a Canada
Child Tax Benefit Notice informing her that, until she provides
her spouse's name and social insurance number, she would not
receive any further Child Tax Benefit payments and that the
payment received with respect to July 1998 would be considered an
overpayment.
*
Partly admitted in Reply but fully admitted at commencement of
hearing.
[3]
The Appellant was the only witness to testify. I will attempt to
summarize her evidence. She is employed as a library clerk at the
University of Winnipeg. Before 1989, she was employed by Revenue
Canada as an assessor. Since 1989, she has done some seasonal
work preparing income tax returns for a few months each spring.
The Appellant has cohabited with Markus Buchart since 1990. She
and Mr. Buchart have never gone through any form of marriage
ceremony. She has not made any kind of marriage promise to him.
She does not regard herself as being in a common-law
relationship. She refers to Mr. Buchart as "the man I live
with". She never refers to him as "husband" or
"spouse". She has never heard him refer to her as
"wife" or "spouse". The Appellant and Mr.
Buchart have never received any spousal benefits.
[4]
Having regard to the facts alleged in the Notice of Appeal and
admitted, Amy was born on August 10, 1997. The Appellant is
Amy's mother and Mr. Buchart is Amy's father. The
Appellant and Mr. Buchart have separate finances. The only bank
account which they share is for Amy's education. The
Appellant and Mr. Buchart share household expenses like food,
utilities, car expenses, babysitting costs, etc. The Appellant
feels financially independent from Mr. Buchart. When asked why
she brought this appeal, the Appellant delivered a very long
answer in which she stated that (i) if she trusts someone like
Mr. Buchart, she does not need a contract like marriage to
confirm or to prove or to evidence that trust; and (ii) the state
has no business intruding itself into the life of a particular
individual concerning how she might characterize her relationship
with another individual.
[5]
In cross-examination, the Appellant gave further evidence. She
met Mr. Buchart in 1989 and 18 months later, he moved into
the house she was renting. Her relationship with him has been
intimate and sexual and exclusive and beyond the level of
friendship. She has not had a romantic or intimate relationship
with any man other than Mr. Buchart since they started living
together. In 1993, they purchased the house they had been renting
and living in since 1990. They purchased the house together; they
shared the cost equally; and they registered the title jointly so
that, if the Appellant died, title to the house would go wholly
to Mr. Buchart. They have exclusive use of the house except for a
portion rented to a tenant. The Appellant and Mr. Buchart take
their meals together. The Appellant does most of the cooking but
Mr. Buchart makes bread, beer and wine. They share household
chores and the task of doing Amy's laundry. They share the
cost of furnishing their home. The Appellant does most of the
yard work. They visit friends together and they exchange small
gifts.
[6]
The Appellant stated that they did not hold themselves out as a
family raising Amy but she acknowledged answering the following
question on examination for discovery:
Q.
And do you hold yourselves out with your family (i.e. the
Appellant's relatives) as a couple living together, raising a
child together?
A.
Yes.
(Question No. 129)
[7]
The Appellant and Mr. Buchart keep a ledger of Amy's
expenses. Every couple of months they add up the ledger and
allocate it 50-50. The Appellant acknowledged that there is
probably a financial benefit from her living together with Mr.
Buchart. She thinks that she has long-term disability coverage
but, if she or Mr. Buchart lost income-earning capacity, she
would not expect that the person without income would be asked to
leave the dwelling. The house is registered in both names. The
house is insured in both names. Mr. Buchart has a life insurance
policy in connection with his employment in which the Appellant
is named beneficiary. In 1992, the Appellant and Mr. Buchart
purchased a country property in their joint names – 70
acres about 110 kilometres east of Winnipeg.
[8]
According to the pleadings, the principal issue in this appeal is
whether the Appellant is entitled to the Child Tax Benefit for
the months July 1998 to June 1999 inclusive. That statement
of the issue is not entirely accurate. In argument, counsel
clarified the issue as follows. The question is not the
Appellant's entitlement to the Child Tax Benefit for that
period of months but whether the income of Markus Buchart must be
included in determining the amount of the benefit. This leads to
the underlying question of whether Markus Buchart was the
Appellant's "cohabiting spouse" for the purpose of
the benefit. The relevant sections of the Income Tax Act
are set out below:
122.61(1)
Where a person and, where the Minister so demands, the
person's cohabiting spouse at the end of a taxation year
have filed a return of income for the year, an overpayment on
account of the person's liability under this Part for the
year is deemed to have arisen during a month in relation to which
the year is the base taxation year, equal to the amount
determined by the formula
...
(emphasis added)
The formula is not relevant but subsection 122.61(1) creates a
deemed overpayment of tax the amount of which depends in part
upon (i) the person's "adjusted income" and (ii)
the number and age of the person's qualified dependants.
122.6
In this subdivision,
“adjusted income” of an individual for a taxation
year means the total of all amounts each of which would be the
income for the year of the individual or of the person who was
the individual's cohabiting spouse at the end of the year
if no amount were included in respect of a gain from a
disposition of property to which section 79 applies in computing
that income;
(emphasis added)
If a particular person claiming the Child Tax Benefit has a
"cohabiting spouse" at the end of taxation year, the
income of the cohabiting spouse is combined with that
person's income for the purpose of determining that
person's "adjusted income" for the year.
“cohabiting spouse” of an individual at any time
means the person who at that time is the individual's spouse
and who is not at that time living separate and apart from the
individual and, ...
252(4) In this Act,
(a)
words referring to a spouse at any time of a taxpayer include the
person of the opposite sex who cohabits at that time with
the taxpayer in a conjugal relationship and
(i)
has so cohabited with the taxpayer throughout a 12-month period
ending before that time, or
(ii)
would be a parent of a child of whom the taxpayer would be a
parent, if this Act were read without reference to
paragraph (1)(e) and subparagraph (2)(a)(iii)
and, for the purposes of this paragraph, where at any time the
taxpayer and the person cohabit in a conjugal
relationship, they shall, at any particular time after that
time, be deemed to be cohabiting in a conjugal relationship
unless they were not cohabiting at the particular time for a
period of at least 90 days that includes the particular time
because of a breakdown of their conjugal
relationship;
(emphasis added)
(b)
...
[9]
Having regard to the extended meaning of "spouse" in
paragraph 252(4)(a), the real issue in this appeal is
whether, at any relevant time, the Appellant and Markus Buchart
did "cohabit in a conjugal relationship". The Appellant
argues that there are four marital states in the common law
provinces:
(a)
single;
(b)
cohabitation in sexual relationship of two people of the opposite
sex, colloquially referred to as a "common-law
relationship" or "living common-law" but
properly termed in law "concubinage";
(c)
marriage valid by common law or "common law marriage";
and
(d)
marriage solemnized pursuant to a statute, which may be termed
"statutory marriage" or "solemnized
marriage", is often inaccurately referred to as "legal
marriage".
The Appellant argues that she and Mr. Buchart fall within
state (a) or (b) and not in state (c) or (d) because a marriage
under (c) or (d) requires both the legal capacity to marry and a
willingness to marry. The Appellant rejects the concept of
marriage for herself. She is resolved to remain single with
respect to her personal identity. With respect to her
cohabitation with Mr. Buchart and their joint parenting of Amy,
the Appellant argues that their relationship is
"concubinage" (as in marital state (b) above) because
there is an absence of any willingness to marry. Counsel for the
Appellant summarized this argument as follows:
The essence of both common law marriage and solemnized
marriage is an agreement. Marriage is a bargain between two
people. It is by definition impossible to be married without both
parties' knowledge and consent.
[10] Referring
to the four martial states listed in paragraph 9, I am satisfied
that there has never been a solemnized marriage between the
Appellant and Mr. Buchart. Therefore, I can eliminate state
(d). Similarly, I am not concerned with how the Appellant
identifies herself as single. Therefore, I can eliminate state
(a). I am concerned only with the manner in which the
Appellant's relationship with Mr. Buchart is characterized
for the purposes of section 122.6 of the Income Tax Act
and, considering the four marital states put forward by the
Appellant, I seem to be faced with a choice between states (b)
and (c). As I understand the Appellant's argument, if I
assume that all parties have the capacity in law to marry, the
principal distinction between states (b) and (c) is that, under
state (b), the cohabiting man and woman have decided that they
will not marry and they do not regard themselves as married
whereas, under state (c), the cohabiting man and woman are
willing to marry without any wedding ceremony or other
solemnizing event and they regard themselves as married.
[11] Counsel
for the Appellant referred to a discussion of "common-law
spouse" by the British Columbia Court of Appeal in Keddie
v. Currie, (1991) 60 B.C.L.R. (2d) 1. In Keddie, the
question was whether Mr. Keddie could qualify as a "common
law spouse" of Dorretta Currie in order to claim against her
estate. The British Columbia Court of Appeal was required to
construe and apply section 85 of the Estate Administration
Act:
85.
In this Part ...
"common law spouse" means either a person who is
united to another person by a marriage that, although not a legal
marriage, is valid by common law, or a person who has lived
and cohabited with another person as a spouse and has been
maintained by that person for a period of not less than 2 years
immediately preceding his death.
(emphasis added)
There was no evidence that Mr. Keddie had ever been
"maintained" by Ms. Currie and so the Court was
concerned only with the first branch of the section 85 test.
Cumming J.A. writing for the majority stated:
Page 18 The effect of the Marriage Act ...
is to require that marriages entered into in British Columbia be
performed in compliance with the Marriage Act, and to
preserve a separate role for the term "common law
marriage" from that which is common parlance today.
...
Page 19 In light of the foregoing I have no doubt that
common law marriages, i.e. marriages valid by common law, are
separate and distinct from common law unions or relationships and
that it is common law marriages, in the narrow sense of the term,
that are referred to in section 85 of the Estate
Administration Act.
Page 23 Having decided that a marriage "valid by
common law" is indeed a legal relationship distinct from a
"common law union" or "common law
relationship", section 85 of the Estate Administration
Act must be read in that light. It is clear that the facts in
the present case do not fall within the common law marriage
exception to the requirements of formal validity of marriage
discussed above. Mr. Keddie has failed to show that there was a
relationship that placed the parties within the common law
marriage exception and that they satisfied the requirements of a
common law marriage. ...
[12] Counsel
for the Appellant relied on Keddie v. Currie and section
85 of the British Columbia Estate Administration Act to
argue that a common law marriage continues to exist in the
Province of British Columbia. Similarly, he relied on
Blanchett v. Hansell et al, (1944) 52 Man. R. 1, to argue
that a common law marriage continues to exist in the Province of
Manitoba where the Appellant and Mr. Buchart reside. Without
deciding the question, I am prepared to assume that a common law
marriage does exist under Manitoba law. The Appellant and
Mr. Buchart have not had a solemnized marriage and they are
not willing to marry in a common-law sense. Therefore, with
respect to the four marital states listed in paragraph 9, their
cohabitation may very well be concubinage. This line of argument
strikes me as somewhat academic when I am required to interpret
the word "spouse" as defined in paragraph
252(4)(a) of the Income Tax Act. The basic question
is one of statutory interpretation. If Mr. Buchart is the
Appellant's "spouse" within the meaning of
paragraph 252(4)(a), then he is a "cohabiting
spouse" within the meaning of section 122.6 and his income
will have to be combined with the Appellant's income in order
to determine her "adjusted income" for purposes of the
Child Tax Benefit.
[13] In
Corporation Notre-Dame de Bon-Secours v. Communauté
Urbaine de Québec et al, 95 DTC 5017, the Supreme
Court of Canada set out certain rules for interpreting taxing
statutes. After quoting a passage from Dickson C.J. in
Bronfman Trust, Gonthier J. (writing for the Court) stated
at page 5022:
In light of this passage there is no longer any doubt that the
interpretation of tax legislation should be subject to the
ordinary rules of construction. At page 87 of his text
Construction of Statutes (2nd ed. 1983), Driedger
fittingly summarizes the basic principles: "... the words of
an Act are to be read in their entire context and in their
grammatical and ordinary sense harmoniously with the scheme of
the Act, the object of the Act, and the intention
of Parliament". The first consideration should therefore be
to determine the purpose of the legislation, whether as a whole
or as expressed in a particular provision. ...
And at page 5023:
The rules formulated in the preceding pages, some of which
were relied on recently in Symes v. Canada [94 DTC 6001],
[1993] 4 S.C.R. 695, may be summarized as follows:
A - The
interpretation of tax legislation should follow the ordinary
rules of interpretation;
B
- A
legislative provision should be given a strict or liberal
interpretation depending on the purpose underlying it, and that
purpose must be identified in light of the context of the
statute, its objective and the legislative intent: this is the
teleological approach;
C
- The
teleological approach will favour the taxpayer or the tax
department depending solely on the legislative provision in
question, and not on the existence of predetermined
presumptions;
D
-
Substance should be given precedence over form to the extent that
this is consistent with the wording and objective of the
statute;
E
-
Only a reasonable doubt, not resolved by the ordinary rules of
interpretation, will be settled by recourse to the residual
presumption in favour of the taxpayer.
[14] I propose
to follow these rules. With respect to rule B, the underlying
purpose of section 122.6 is to provide a financial benefit for a
parent who is raising a child on low income. The financial
benefit takes the form of an artificial overpayment of tax
("an overpayment ... is deemed to have arisen")
which is refunded to the parent on a periodic basis. The
financial benefit depends on two basic conditions. First, the
child must be younger than a certain maximum age. And second, the
fixed amount of the benefit is reduced by a percentage of the
parent's "adjusted income" with the result that, if
the adjusted income is too high, the financial benefit is cut
off. In my opinion, these two conditions are of equal importance
if the underlying purpose of section 122.6 is to be achieved.
Therefore, when construing the definition of "spouse"
in paragraph 252(4)(a), I am not inclined to give either a
strict or liberal interpretation. I will revert to rule A
and follow the ordinary rules of interpretation construing the
words "in their entire context and in their grammatical and
ordinary sense".
[15] The
important words in paragraph 252(4)(a) are "cohabit
in a conjugal relationship". There is no doubt in my mind
that the Appellant and Markus Buchart cohabit. In paragraph
2 of her Notice of Appeal, she alleges that "The Appellant
resides with Amy's father". That allegation was
admitted. In her oral evidence, she stated that Markus Buchart
was Amy's father. In argument, counsel for the Appellant used
the four marital states listed in paragraph 9 above to make the
point that the "cohabitation" of the Appellant and
Markus Buchart was "concubinage" within state (b).
According to the Appellant's oral evidence, there is no doubt
that she and Markus Buchart have an intimate relationship. The
Canadian Oxford Dictionary (1998) defines "cohabit" as
follows:
Live together amicably; live together in a sexual and romantic
relationship without marriage;
I find as a fact that the Appellant and Markus Buchart did
cohabit at all relevant times within the meaning of paragraph
252(4)(a).
[16] Did the
Appellant and Markus Buchart cohabit in a "conjugal
relationship"? They certainly had a relationship. Was it
conjugal? The Canadian Oxford Dictionary (1998) defines
"conjugal"as follows:
Of marriage or the relation between husband and wife;
Black's Law Dictionary (1990) has a similar
definition:
Of or belonging to marriage or the married state; suitable or
appropriate to the married state or to married persons;
matrimonial; connubial;
This last dictionary definition offers the alternatives
"marriage or the married state" and "appropriate
to the married state or to married persons". The Appellant
and Markus Buchart have never participated in any wedding
ceremony or other solemnizing event which would cause them to be
married persons. There has been no solemnized marriage or
statutory marriage. But the status of the Appellant and Markus
Buchart as a woman and man cohabiting in an intimate
relationship, and bearing and raising a daughter, is "of or
belonging to" the married state and "suitable or
appropriate to" the married state. The status of the
Appellant and Markus Buchart (cohabiting and raising their
daughter together) has the badges of the "married
state" even if the Appellant and Markus Buchart personally
reject the concept of marriage.
[17] An old
cliché comes to mind. If a two-legged creature with
feathers waddles like a duck, quacks like a duck, and looks like
a duck, it must be a duck. By parallel reasoning, if a man and
woman own and share the same dwelling; take their meals together;
share housekeeping chores; live in physical intimacy; and bear
and raise a child, they must be in a relationship that is
"suitable or appropriate to the married state" per
Black's Law Dictionary. In other words, they cohabit in a
conjugal relationship. The Appellant's argument depends on
her subjective attitude toward marriage. How could a stranger
know that the Appellant and Markus Buchart do not accept the
institution of marriage or that they have an agreement not to
marry when all of their surrounding circumstances give them the
appearance of having either a solemnized marriage or a
common-law marriage?
[18] In
deciding whether the Appellant and Markus Buchart cohabit in a
conjugal relationship within the meaning of paragraph
252(4)(a), their status must be determined by objective
standards and not by subjective attitudes. Reading the words
"cohabit in a conjugal relationship" in their ordinary
sense and harmoniously with the scheme of section 122.6, those
words describe the domestic status of the Appellant and Markus
Buchart. In my opinion, Markus Buchart is the
"spouse" of the Appellant within the meaning of
paragraph 252(4)(a). Accordingly, he is the
Appellant's "cohabiting spouse" for the purposes of
section 122.6. The appeal is dismissed with costs.
Signed at Ottawa, Canada, this 21st day of November, 2000.
"M.A. Mogan"
J.T.C.C.
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