Date: 20060126
Docket: A-89-05
Citation: 2006 FCA 32
CORAM: RICHARD C.J.
EVANS J.A.
PELLETIER J.A.
BETWEEN:
JANUSZ J. BUJNOWSKI
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
PELLETIER J.A.
[1] Mr. Bujnowski appeals from the decision of Mr. Justice Sarchuk of the Tax Court of Canada reported at 2005 TCC 90. The Tax Court judge dismissed Mr. Bujnowski's appeal from the Minister's determination that he was a resident of Canada in the 2001 tax year, but allowed the appeal to give Mr. Bujnowski the benefit of the foreign tax credit on income tax paid in the United States. Mr. Bujnowski also appeals from the Tax Court judge's issuance of amended reasons and judgment reducing the amount of his entitlement with respect to that foreign tax credit.
[2] Mr. Bujnowski lived and worked in the United States for 10 months in 2001, as a result of accepting a position which he believed to be of indefinite duration. As it turned out, his belief was mistaken and the job ended after 10 months. While Mr. Bujnowski was in the United States, his wife continued to live in the family home in Mississauga.
[3] On the issue of his residence, Mr. Bujnowski's position is that he was resident in both Canada and the United States during 10 months of 2001 and that, as a result, his residence, for income tax purposes, is to be determined according to the tie-breaker rules found in the Canada - United States Tax Convention. Mr. Bujnowski says that the Tax Court judge either did not apply the terms of the Convention or applied them improperly.
[4] Counsel for the Crown concedes that Mr. Bujnowski was a resident of both Canada and the United States in 2001. He concedes as well that the Tax Court judge was bound to apply the tie breaker rules found at paragraph 4(2) of the Convention. It is the Crown's position that the Tax Court judge did, in fact, apply the tie-breaker rules and that, having regard to the standard of review on questions of mixed fact and law, there is no basis upon which this court should intervene.
[5] Paragraph 4(2) of the Convention sets out four tie breaker rules, only the first of which is material to this appeal. It provides as follows:
2. Where by reason of the provisions of paragraph 1, an individual is a resident of both Contracting States, then his status shall be determined as follows:
(a) He shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States or in neither State, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests).
...
[6] The Tax Court judge set out the arguments of the parties as to the application and effect of the Convention, as well as the facts which he considered material to its operation. He set out his conclusions as para. 8 of his reasons, reproduced below:
[para8] Notwithstanding the Appellant's submissions to the contrary, the evidence before the Court leads clearly to the conclusion that his residential ties to Canadawere most significant. Not only did the Appellant's wife remain in Canada in a residence which they owned, it is also a fact that she remained in order to find employment. There is no evidence before the Court to indicate that the Appellant had at any time contemplated the disposition of the dwelling nor is there any evidence to support his statement that he had been considering the purchase of a residence in Michigan. A number of other residential ties with Canada also tend to lead to a determination that the Appellant was factually resident in Canada while employed in the US. He retained, as previously indicated, personal property as well as social and economic ties in Canadasuch as a bank account, brokerage accounts and self- directed retirement accounts, etc. He also retained his Canadian passport and memberships in Canadian professional organizations. On the evidence before me, I have concluded that the Appellant was a factual resident of Canadaand accordingly, the Minister's assessment was correct.
[7] While this paragraph deals only with the Canadian elements of Mr. Bujnowksi's situation, when it is read in context it is clear that the judge is here stating his conclusions with respect to the various elements he considered in determining to which State the centre of Mr. Bujnowski's vital interests were closer. The judge's use of the term "factual resident" may suggest that he is applying the domestic test for residence found in Thomson v. M.N.R. [1944] C.T.C. 63 (Ex. Ct), but he used the same term elsewhere in his reasons in a context where it could only mean "resident of Canada for the purposes of the Convention."
[8] I am satisfied that the judge recognized Mr. Bujnowski's dual residency in the 2001 tax year and that he applied the tie-breaker rule found at para. 4(2) of the Convention, as he ought to have. Despite Mr. Bujnowski's attempt to persuade us that the judge's conclusions are replete with factual errors, I am satisfied that they are grounded in the evidence before him and are free of any palpable and overriding error.
[9] At the end of his reasons, the Tax Court judge dealt with the issue of the foreign tax credit in these terms:
[para9] There is one other issue which must be dealt with. In assessing the Appellant the Minister had also denied his claim with respect to the deduction of a foreign tax credit in the amount of $14,787.28 for the taxation year in issue. This assessment was made because the Appellant had failed to provide any documentation in support of the claim. During the course of the second hearing, the Respondent advised the Court that a certified copy of the Appellant's 2001 Michigan tax return and copies of two other forms had been produced and on the basis of this information, the Minister concedes that a foreign tax credit in the amount of $14,787.28 may be claimed by the Appellant in computing tax payable for his 2001 taxation year.
[10] Two months after issuing these reasons, and signing judgment allowing Mr. Bujnowski a foreign tax credit in the amount of $14,787.28, the learned Tax Court judge issued amended reasons and an amended judgment reducing the amount of the foreign tax credit to $12, 426.79. We were advised that this amendment was the result of a communication to the Court by counsel for the Crown, a communication to which Mr. Bujnowski was a party to which he responded in due course.
[11] Mr. Bujnowski appeals from the issuance of the amended judgment on the ground that, having signed judgment allowing the appeal, the Tax Court judge was functus officio. Counsel for the Crown points out that the Tax Court judge based his judgment on the Crown's concession that Mr. Bujnowksi was entitled to a foreign tax credit in the amount of the tax actually paid. The transcript of the proceedings before the Tax Court judge, at p.p. 123-124 shows that the Crown's concession was that Mr. Bujnowski was only entitled to a credit equal to the amount of tax paid less any refund received. The original reasons and judgment referred to the amount of tax initially paid without taking into account the refund received by Mr. Bujnowski. The second judgment is in the net amount of the tax paid after taking the refund into account.
[12] We are satisfied that this falls within the Court's jurisdiction to correct slips and errors of calculation. Accordingly I see no reason to disturb the Tax Court judge's amended judgment.
[13] As a result, the appeal should be dismissed with costs.
"J. D. Denis Pelletier"
"I agree
J. Richard"
"I agree
John M. Evans"
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