Citation: 2012TCC36
Date: 20120130
Docket: 2011-2309(IT)I
BETWEEN:
COLIN FOREMAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Webb J.
[1]
The Appellant filed a
notice of appeal to this Court in which he indicated that he was appealing the
assessment (or reassessment) of his tax liability for 2008 and 2009. At the
commencement of the hearing the Respondent brought a motion to quash the
Appellant’s purported appeal in relation to 2008 on the basis that the Appellant
had not served a notice of objection to the assessment of his tax liability for
2008. An affidavit of an officer of the Canada Revenue Agency was filed with
the Court. In this affidavit the officer stated that there was no record of the
Appellant filing a notice of objection to the assessment of his 2008 taxation
year.
[2]
Subsection 169(1) of the Income
Tax Act (the “Act”) provides as follows:
169. (1) Where a taxpayer has served notice of objection to an
assessment under section 165, the taxpayer may appeal to the Tax Court of
Canada to have the assessment vacated or varied after either
(a) the Minister has confirmed the
assessment or reassessed, or
(b) 90 days have elapsed after service of the notice of objection
and the Minister has not notified the taxpayer that the Minister has vacated or
confirmed the assessment or reassessed,
but no appeal under this section may be instituted after the expiration
of 90 days from the day notice has been mailed to the taxpayer under section
165 that the Minister has confirmed the assessment or reassessed.
[3]
In Bormann v. The Queen,
2006 DTC 6147, the Federal Court of Appeal stated as follows:
3 Section 169(1) of the Income Tax Act obliges a
taxpayer to serve Notice of Objection in order to appeal an assessment. In other
words, service of a Notice is a condition precedent to the institution of an
appeal.
4 As mentioned, the appellant did not serve a Notice of
Objection nor is there evidence that the appellant made an application to the
Ministry to extend the time to file a Notice of Objection.
5 Once it is clear that no application for an extension of
time was made, the law is clear that there is no jurisdiction in the Tax Court
to further extend the time for equitable reasons.
Minister of National Revenue v. Minuteman Press of Canada Co.,
88 DTC 6278, (F.C.A.).
6 As a result, there is no basis upon which it can be said
that the Tax Court Judge erred in quashing the appellant's appeals for the 1992
to 1998 taxation years.
[4]
The Appellant
acknowledged that he did not serve a notice of objection in relation to the
assessment of his tax liability for 2008. As a result the appeal related to the
assessment of his 2008 taxation year is quashed.
[5]
The appeal in relation
to the reassessment of the Appellant’s 2009 taxation year arises as a result of
the claim by the Appellant for a tax credit as provided in paragraphs 118(1)(b)
and 118(1)(b.1) of the Income Tax Act (the “Act”) in
relation to his daughter. The Appellant’s claim was denied on the basis that
the Appellant was required to pay child support in 2009.
[6]
Subsection 118(5) of
the Act provides that:
(5) No amount may be deducted under subsection (1) in computing an
individual's tax payable under this Part for a taxation year in respect of a
person where the individual is required to pay a support amount (within the
meaning assigned by subsection 56.1(4)) to the individual's spouse or
common-law partner or former spouse or common-law partner in respect of the
person and the individual
(a) lives separate and apart from the spouse or common-law
partner or former spouse or common-law partner throughout the year because of
the breakdown of their marriage or common-law partnership; or
(b) claims a deduction for the year because of section 60 in
respect of a support amount paid to the spouse or common-law partner or former
spouse or common-law partner.
[7]
Subsection 56.1(4) of
the Act provides that:
“support amount” means an amount payable or receivable as an
allowance on a periodic basis for the maintenance of the recipient, children of
the recipient or both the recipient and children of the recipient, if the
recipient has discretion as to the use of the amount, and
(a) the recipient is the spouse or common-law partner or
former spouse or common-law partner of the payer, the recipient and payer are
living separate and apart because of the breakdown of their marriage or
common-law partnership and the amount is receivable under an order of a
competent tribunal or under a written agreement; or
(b) the payer is a legal parent of a child of the recipient
and the amount is receivable under an order made by a competent tribunal in
accordance with the laws of a province.
[8]
Therefore if the
Appellant was required to pay child support for his daughter in 2009 he is not
entitled to claim a credit under subsection 118(1) of the Act in
relation to his daughter for 2009. The issue in this appeal is whether the
Appellant was required to pay a support amount in relation to his
daughter in 2009.
[9]
The Appellant and his
spouse separated in 2003. The Appellant introduced a copy of the Order of the
Provincial Court of British Columbia that was filed on September 24, 2004 (the
“2004 Order”). The 2004 Order is identified as a “Consent Order” and it
provides in part as follows:
THIS COURT ORDERS that the Orders
made by Judge Chen on March 12, 2003 and July 16, 2003 shall be rescinded.
THIS COURT FURTHER ORDERS that
JO-ANN NADALIN and COLIN FOREMAN shall have joint custody and guardianship of
the child, namely…
THIS COURT FURTHER ORDERS that
this primary residence of the said child shall be with JO-ANN NADALIN.
THIS COURT FURTHER ORDERS that
COLIN FOREMAN shall have access to the said child every Friday afternoon until
Sunday afternoon and any other times as agreed to by the parties.
UPON COLIN FOREMAN having been found to be a resident
of British Columbia and to have
an annual income of $13,653 for the purposes of determining the table amount of
child support
THIS COURT FURTHER ORDERS that pursuant to the child
support guidelines COLIN FOREMAN shall pay to JO-ANN NADALIN for the
maintenance of the said child the sum of $150 per month. Such payment shall
commence on the 1st of September, 2004 and continue on the 1st of each and
every month thereafter.
[10]
The only other Order
that was introduced during the hearing was an Order of the Provincial Court of
British Columbia as a result of a hearing held on March 2, 2011 (the “2011
Order”). The 2011 Order is described as an Interim Order. There is no
indication that the 2011 Order rescinds the 2004 Order (as the 2004 Order
stated that it rescinded the prior Orders of Judge Chen) nor does the 2011 Order
address the issue of the child support payments. The 2011 Order only addresses
the issues of custody, guardianship, residence and access.
[11]
The Appellant’s
argument is that he was no longer required to pay child support in 2009
under the 2004 Order as the child had started to reside with him prior to 2009.
He also stated that Jo-Ann Nadalin agreed that he was no longer required to pay
child support but she denied that there was any such agreement. However, it is
clear that the 2004 Order has not been changed in relation to the provision
that required the Appellant to pay child support. While the Appellant may have
a basis upon which he could have the requirement to pay child support removed,
until this requirement to pay child support is removed by another Order of the
Provincial Court of British Columbia (or by a higher Court with the authority
to remove such requirement) the Appellant is still required to pay child
support. The Appellant (even if he had Jo-Ann Nadalin’s consent) cannot change
or rescind an Order of the Provincial Court of British Columbia by himself.
Only the Provincial Court of British Columbia (or a higher Court with the
authority to change an Order of the Provincial Court of British Columbia) can
change an Order of that Court. This Court does not have the authority to change
an Order of the Provincial Court of British Columbia.
[12]
In D.B.S. v. S.R.G.,
[2006] 2 S.C.R. 231, Justice Bastarache, writing on behalf of the majority of
the Justices of the Supreme Court of Canada stated that:
63 The
immediate concern with such retroactive awards is that they disturb the
certainty that a payor parent has come to expect: see Andries v. Andries
(1998), 126 Man. R. (2d) 189 (C.A.), at para. 48. A payor parent who diligently
follows the instructions of a court order may expect that (s)he would not be
confronted with a claim that (s)he was deficient in meeting his/her
obligations. After all, until it is varied, a court order is legally
binding. It provides comfort and security to the recipient parent, but
it also provides predictability to the payor parent. Put most simply, the payor
parent's interest in certainty appears to be most compelling where (s)he has
been following a court order.
64 On the
other hand, parents should not have the impression that child support orders
are set in stone. Even where an order does not provide for automatic
disclosure, variation or review, parents must understand that it is based upon
a specific snapshot of circumstances which existed at the time the order was
made. For this reason, there is always the possibility that orders may be
varied when these underlying circumstances change: see s. 17 of the Divorce
Act; s. 18(2) of the Parentage and Maintenance Act. But even if the
parents choose not to seek variation of an order, depending on why (and how
freely) this choice was made, the child may still have the right to receive
support in the amount that should have been payable. The certainty offered by a
court order does not absolve parents of their responsibility to continually
ensure that their children receive the appropriate amount of support.
65 In my
view, a court order awarding a certain amount of child support must be
considered presumptively valid. This presumption is necessary not only to
maintain the certainty promised by a court order, but also to maintain respect
for the legal system itself. It is inappropriate for a court, just as it
is inappropriate for a parent, to assume that a previously ordered award is invalid.
66 The
presumption that a court order is valid, however, is not absolute. As noted
above, the applicable legislation recognizes that a previously ordered award
may merit being altered. This power will be triggered by a material change in
circumstances. Notably, the coming into force of the Guidelines
themselves constitutes such a change under the federal regime: s. 14(c)
of the Guidelines. An increase in income that would alter the amount
payable by a payor parent is also a material change in circumstances: s. 14
of the Guidelines; Willick, at p. 688; see also s. 18(2) of the Parentage
and Maintenance Act. Thus, where the situations of the parents have changed
materially since the original order was handed down, that original order may
not be as helpful as it once was in defining the parents' obligations.
(emphasis
added)
[13]
As noted by Justice
Bastarache above “until it is varied, a
court order is legally binding”. Even if the circumstances have changed with
respect to where the child was residing it is not clear whether the Appellant
would be relieved of his obligation to pay child support for any period prior
to the Appellant requesting a change. Although in Barthels v. The
Queen, [2002] T.C.J. No. 256, [2003] 3 C.T.C. 2756 there is a
reference to arrears being set aside as a result of a change in circumstances,
the same relief was not granted in
Barry v. Rogers, 213 Nfld.
& P.E.I.R. 239. In Barry v. Rogers, Justice Handrigan of the Newfoundland
and Labrador Supreme Court - Trial Division stated that:
16 Urville
Rogers has asked to be relieved of the arrears of support that have accumulated
under the May 4, 2001 order. I am not prepared to allow this part of his
application. He did not pay any support after August 20, 2001 and failed to
apply to this court for any reconsideration until February 6, 2002. It is not
open to him to stop paying support simply because the children were [sic]
spend more time with him. The order is binding on him unless changed by this
court. The support obligation created by that order remains in full force and
effect until May 1, 2002. Then it will be replaced by the order arising from
these proceedings.
[14]
Since the 2004 Order has not been
varied in relation to the obligation of the Appellant to pay child support, he
was still required to pay child support in 2009. The 2004 Order does not
provide that the obligation to pay child support would cease at any particular
time or in any particular circumstances.
[15]
The Appellant referred to the
decisions of this Court in Biggs v. The Queen, [2001] T.C.J. No.
768, [2003] 2 C.T.C. 2438 and Barthels, supra. Both of these cases can
be distinguished.
[16]
In Biggs, Justice Beaubier
noted that:
7 …
More important, in assumption 4 d), the Respondent pleaded that the Order
respecting support for Michael only continued in effect "so long as
Michael resides with the Ex-Spouse on a full time basis ...". Thus, the
obligation to pay support pursuant to the Order only existed as long as Michael
resided with the Appellant's ex-spouse. Exhibit A-1 confirms the fact that
after July 1, 1997, Michael resided with the Appellant and that support
payments for Michael ceased at that time. Therefore the obligation to pay
support pursuant to the Order ceased on July 1, 1997. During the 1999 taxation
year no support amount was payable and all of the other requirements under s.
118 were met. Therefore the Appellant was entitled to the equivalent-to-spouse
credit.
[17]
The decision in Biggs is
distinguishable from the present case because the Order in that case provided
that the obligation to pay support amounts would only continue “so long as
Michael resides with the Ex-Spouse on a full time basis ...”. There is no such
condition in the 2004 Order in this case.
[18]
In Barthels, Justice
Hershfield noted that:
12 Thirdly,
I find that the First Order payment requirement was inherently conditional on
the custody situation set out in that order. That situation changed in the year
preceding the subject year and remained changed throughout the subject year.
The First Order was not meant to apply to such case. The Second and Third
Orders setting aside the arrears was, in my view, perfunctory and must be given
the same effect as setting aside the order that gave rise to the arrears. The
Second and Third Orders acknowledged the state of affairs, the legal
arrangement, as agreed to when the First Order was made. They acknowledged the
inherently conditional nature of the First Order and clarified that the requirement
to pay child support for Stephanie was not to have effect when the premises on
which that requirement was imposed ceased to exit. These Orders, while not
expressly retroactive in vitiating that requirement, have that effect
nonetheless, in my view.
[19]
There were subsequent Orders in Barthels
that set aside arrears and which could be interpreted as setting aside the
requirement to pay support. There are no such subsequent Orders in this case.
[20]
Since the 2004 Order was still in
effect in 2009, the Appellant was still required to pay a support amount
in 2009 and therefore he was not entitled to a tax credit as provided in
paragraph 118(1)(b) or 118(1)(b.1) of the Act in 2009 as
result of the provisions of subsection 118(5) of the Act. As a result
the Appellant’s appeal from the reassessment of his tax liability for 2009 is
dismissed, without costs.
Signed at Halifax, Nova Scotia,
this 30th day of January 2012.
“Wyman W. Webb”
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