Adams v. The Queen, 85 DTC 5528, [1985] 2 CTC 317 (FCTD)

Collier, J:—This is an appeal from a decision of the Tax Review Board: Adams v MNR, [1981] CTC 2543; 81 DTC 504 pursuant to which an income tax assessment by the Minister of National Revenue for the plaintiff’s 1978 taxation year was upheld.

At the conclusion of the hearing, I stated that I intended to dismiss the plaintiff’s action and that written reasons would follow later.

The plaintiff is an accountant residing in the North Vancouver area of British Columbia. In 1978 he was married to Cathryn Adams. In 1978, his wife conceived, and in 1979 gave birth to a living female child. In his tax return for the 1978 taxation year, the plaintiff claimed an amount of $460 as a deduction from income for support of a wholly dependent child. He invoked paragraph 109(1)(d) of the Income Tax Act, RSC 1952, c 148 as amended by SC 1970-71-72, c 63:

109(1) For the purpose of computing the taxable income of an individual for a taxation year, there may be deducted from his income for the year such of the following amounts as are applicable:

(d) for each child or grandchild of the individual who, during the year, was wholly dependent upon him for support and was

(i) under 21 years of age,

The plaintiff did not claim the married status deduction for the support of a spouse pursuant to paragraph 109(1 )(a) of the statute.

The Minister of National Revenue, by assessment, disallowed the deduction. He took the view the plaintiff did not, in 1978, have a child under the age of 21 years, wholly dependent on him for support. In the defence filed in this action, it was alternatively submitted that a conceived, but unborn child, is not a child within the meaning of paragraph 109(1)(d).

The plaintiff and his wife gave evidence at the hearing. They both worked in 1978, and had their own bank accounts plus a joint account. Revenue from a rental property went into the joint account. The plaintiff paid all the household expenses in 1978, his wife’s earnings being retained as her own. Her income for that year was between $7,000 and $8,000. They had no children born either during or previous to 1978.

For the plaintiff, it was argued that paragraph 109(1)(d) above, is broad enough to include an unborn child or foetus and should be interpreted accordingly.

The support here, it was said, was the provision of physical circumstances, residence, assistance and necessaries of life for the mother and, by virtue of subsection 109(3) (infra), for the unborn child.

The plaintiff endeavoured to distinguish Halliday v MNR, [1979] CTC 2852; 79 DTC 715. There, D E Taylor, the same member who heard the case presently under appeal, held against the taxpayer on an identical set of facts.

I shall first consider whether for the purpose of paragraph 109(1 )(d) of the Act, the word “child” is to be taken to include an unborn child. There seems to be little doubt that dictionaries show several different fundamental meanings of the word, depending on the context. It can be taken to include a foetus or unborn child. It can also be restricted to describing a young person between infancy and youth or between infancy and adulthood.

For many years now at common law, as well as in testamentary cases and in questions of succession and inheritance, “child” and “child living” have been interpreted to include a child “en ventre sa mère”. The same rule has also been applied in interpreting certain statutes.

It is noteworthy, however, that the more extended definition was, as a general rule, applied where it would enure to the direct benefit of the child, subsequently born, or of his or her descendants or beneficiaries, rather than a third person.

When used in a statute, the actual context in which the word is used, the general purpose and the other provisions of the Act, must, as well, be considered. The defendant relies on the case of Jackson v Voss [1923] 2 KB, 357. This was a decision regarding a deduction under the British Finance Act, 1920, for “children living”. Rowlatt, J in ruling against the taxpayer had this to say:

I feel no doubt about this case. I am quite alive to the wide bearing of the rule, in different classes of cases, that the words “child living” are to be construed as including a child en ventre sa mère .. .

In this case the respondent says that because his wife in July gave birth to twins he can, in the words of s 21, sub-s 1, of the Finance Act, 1920, prove that he had living at the commencement of the year of assessment children under the age of sixteen. The argument appears to me to be untenable. By the Finance Act, 1920, what was intended was that the size of a man's family — the number of his children — should be counted on a particular date and an allowance made to him accordingly. When, in effect, the section says that, I cannot believe that it was ever intended that the man claiming the allowance could, on a subsequent date, go back and count as actually living on the first date children who were not then born . . .

A definite date has to be taken for this purpose, April 4, and a child actually born after that date is excluded for that year in considering the allowance to which the man is entitled, but the allowance is obtained at the other end. This case is in a different region from those in which the expression “child living” has been construed as including a child en ventre sa mère. The appeal must be allowed.

Turning now to our own statute, I note that, in establishing categories and conditions for dependency, several provisions of the Act, including the one presently in issue before me, refer to “years of age” of the dependent child (eg 109(1)(d), (e), (f)(ii)(iii), 252(1)(b), 63(3)(a), etc). These provisions must necessarily refer to age from the date of birth. In subsection 252(1), for instance, although Parliament purported to give an extended meaning to the word “child”, there is no indication any such extension is to apply to unborn children. There is no provision whatsoever for an unborn child or a foetus. On a fair interpretation of that provision, the contrary would seem quite clearly to apply. Subsection 252(1) reads as follows:

252. (1) In this Act, words referring to a child of a taxpayer include

(a) an illegitimate child of the taxpayer,

(b) a person who is wholly dependent on the taxpayer for support and of whom the taxpayer has, or immediately before such person attained the age of 21 years did have, in law or in fact, the custody and control, and

(c) a daughter-in-law or son-in-law of the taxpayer.

Paragraph (a) above must necessarily be taken as referring to the date of birth, since it is trite law a child born in wedlock is necessarily legitimate regardless of whether the parents were married or not previous to that time. In paragraph (b), the attainment of 21 years of age must necessarily apply to the age from the date of birth, and not to 21 years from the date of conception. Similarly in paragraph 109(1)(d), with which we are concerned in this action, the age must necessarily be considered from the date of birth.

For the above reasons I find that “child” in paragraph 109(1)(d) does not include an unborn child and would dismiss the action. But even if the word “child” could, in paragraph 109(1 )(d), be interpreted to include an unborn child, the plaintiff would still have to establish the child was, in accordance with the section: “wholly dependent upon him for support”.

On this issue the plaintiff invokes subsection 109(3):

109(3) For the purpose of the deduction for a child under paragraph (1)(d), it shall be assumed, unless the contrary is established, that an illegitimate child was wholly dependent on his mother and that any other child was wholly dependent on his father.

The words “unless the contrary is established” are, of course, of great significance. “Wholly” is defined as follows in the Shorter Oxford Dictionary (3rd Edition, Vol Il):

1. As a whole, in its entirety, in full, throughout, all of it (now rare).

2. Completely, entirely, to the full extent; altogether, thoroughly, quite ME. b. Entirely, so as to exclude everything else; hence practically = exclusively, solely, only.

The Living Webster Encyclopedic Dictionary defines it as follows:

To the whole amount or extent; so as to comprise or involve all; entirely; totally; altogether; quite.

It would be completely illogical, and indeed would militate against common sense, to hold a foetus whose very existence depends entirely on the life of the mother, and whose sustenance and health depends on her physical state and ability to furnish the required nutrients, could by virtue of subsection 109(3) be held to be wholly dependent on the father for its sustenance.

For the above reasons, this action will be dismissed with costs.

Appeal dismissed.