Rouleau,
J.:—This
appeal,
by
way
of
trial
de
novo,
is
concerned
with
reassessments
of
income
tax
for
the
plaintiff's
1976
and
1977
taxation
years.
In
filing
his
returns,
the
plaintiff
computed
his
income
on
the
basis
that
he
was
not
"resident"
in
Canada
in
accordance
with
the
provisions
of
sections
114
and
115
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
as
amended.
The
defendant,
on
the
other
hand,
took
the
position
that
the
plaintiff
was
indeed
a
"resident"
during
this
period.
By
way
of
background,
the
plaintiff
was
born
and
raised
in
Canada.
After
obtaining
his
M.B.A.
in
1968,
he
began
working
as
a
consultant,
offering
both
management
consulting
and
research
services.
In
the
early
70s,
he
joined
forces
with
other
consultants
and
created
A.R.A.
Consultants
Ltd.
(“A.R.A.”),
a
corporation
incorporated
pursuant
to
the
laws
of
Ontario.
Mr.
Glow
was
one
of
four
original
shareholders,
officers
and
directors
of
A.R.A.
The
business
of
the
company
and
the
enumeration
paid
to
its
individual
members
was
organized
pursuant
to
a
profit
centre
concept.
The
record
indicates
that
in
May,
1976,
the
plaintiff
was
a
50
per
cent
partner
in
the"Toronto
branch"
of
A.R.A.,
the
other
partner
being
Mr.
Paul
Stanley.
The
Toronto
branch
provided
consulting
services
primarily
to
the
public
sector;
by
late
1975,
this
aspect
of
the
business
became
almost
dormant
because
of
a
government
imposed
moratorium
on
the
use
of
outside
management
consultants.
Both
Mr.
Stanley
and
the
plaintiff
were
then
actively
engaged
in
seeking
other
avenues
in
which
to
expand
their
business
base.
Mr.
Stanley
looked
into
social
research;
the
plaintiff
was
not
qualified
in
this
field;
he
had,
however,
developed
some
expertise
in
management
problems
facing
developing
nations
and
over
the
years
he
had
made
some
contacts
with
Canadian
and
foreign
international
development
organizations.
This
initiative
came
to
fruition
on
July
6,
1976,
when
A.R.A.
entered
into
an
agreement
with
the
Canadian
Commercial
Corporation,
a
federal
Crown
corporation.
Pursuant
to
the
terms
of
this
contract,
A.R.A.
was
to
furnish
consulting
advice
to
a
division
of
the
Department
of
Supply
and
Services
which
in
turn
were
to
provide
services
in
Nigeria
to
the
Nigerian
Federal
Ministry
of
Establishments.
This
contract
required
personal
performance
by
the
plaintiff
and
his
presence
in
Nigeria;
payment
of
fees
at
a
per
diem
rate
of
$300
Canadian
not
to
exceed
a
total
cost
of
$100,000;
it
was
to
commence
July
15,
1976
and
end
January
14,
1978.
It
also
provided
for
removal,
travel
and
living
expenses
for
the
plaintiff
and
his
dependants
up
to
a
maximum
of
$25,000.
According
to
the
terms
of
the
contract,
all
moneys
(fees
and
expenses
claimed)
were
to
be
paid
to
A.R.A.
(Toronto
branch);
it
in
turn,
would
pay
the
plaintiff.
As
an
independent
contractor,
A.R.A.
was
the
employer
and
was
to
withhold
deductions
for
income
tax,
C.P.P.,
etc.
Pursuant
to
the
plaintiff's
instructions
dated
July
5,
1976,
all
moneys
owing
to
him
under
the
contract
were
to
be
deposited
into
his
Canadian
bank
account
and
they
were
specifically
advised
not
to
withhold
any
income
taxes
on
these
payments
since
he
intended
to
give
up
his
Canadian
resident
status.
The
plaintiff
was
pressed
for
time
in
which
to
settle
his
personal
affairs
prior
to
his
departure
for
Nigeria.
He
had
recently
purchased
a
duplex
and
had
been
occupying
the
upper
unit;
it
was
rented
on
a
month
to
month
basis.
His
intention
was
to
sell
the
property
when
the
market
would
provide
him
with
a
reasonable
profit.
He
had
arranged
with
the
Toronto
staff
to
provide
"property
management”
services
during
the
period
of
his
absence;
it
was
to
collect
rents
and
pay
expenses
such
as
maintenance,
mortgage,
and
taxes;
it
was
also
given
the
authority
to
negotiate
new
leases.
He
stored
his
“hard”
furnishings,
i.e.,
his
bed,
chairs,
sofas,
and
so
on,
as
well
as
his
winter
clothing,
with
a
commercial
storage
depot.
Boxes
of
"soft
goods"
.e.,
household
and
personal
effects
were
shipped
to
Nigeria.
Storage
and
shipping
expenses
were
provided
for
by
the
Nigerian
contract.
He
sold
his
car
for
a
nominal
sum
primarily
due
to
its
age
and
condition;
cancelled
both
his
automobile
insurance
and
Gulf
credit
card
and
obtained
an
international
driver's
licence.
Some
credit
cards,
namely
American
Express,
Visa
and
Mastercard
were
retained
as
well
as
his
RRSP
accounts;
he
maintained
his
OHIP
coverage,
which
he
was
required
to
do
under
the
terms
of
the
contract.
His
bank
accounts
remained
active;
this
was
necessary
in
order
to
deal
with
the
revenues
and
expenses
related
to
the
rental
property.
Given
the
official
exchange
rates
in
Nigeria
and
the
difficulties
of
obtaining
foreign
currency,
I
am
satisfied
that
this
was
practical
and
necessary.
He
also
arranged
to
enter
into
an
arm's
length
relationship
with
the
Toronto
branch
of
A.R.A.
effective
October
31,
1976.
From
that
time
on,
all
services
performed
by
the
plaintiff
in
the
name
of
A.R.A.
(including
the
Nigerian
contract),
were
to
be
treated
as
having
been
sub-contracted
from
the
Toronto
branch;
98
per
cent
of
the
net
consulting
fees
earned
were
to
accrue
directly
to
him.
In
turn,
he
agreed
to
pay
the
remaining
2
per
cent
to
the
Toronto
branch
as
compensation
for
administrative
services.
Having
completed
these
arrangements,
the
plaintiff
left
Canada
for
Nigeria
accompanied
by
his
friend,
Martha
Dorion.
The
couple
took
up
residence
in
a
hotel
suite
at
the
Holiday
Inn
in
Lagos.
Because
of
the
housing
market,
conventional
permanent
living
quarters
were
not
available
and
they
transformed
the
hotel
suite
into
the
functional
equivalent
of
an
apartment.
During
his
stay
in
Nigeria,
the
plaintiff
obtained
a
Nigerian
driver's
licence,
maintained
two
bank
accounts,
purchased
a
car
as
well
as
a
half-interest
in
another
vehicle.
He
joined
a
sports
and
dining
club
in
Lagos
and
the
local
chapter
of
the
Hash
House
Harriers.
An
office
was
provided
by
the
Nigerian
Ministry
from
which
he
performed
his
duties;
business
cards
identified
nim
as
a
consultant
with
the
Nigerian
government.
By
December,
1977,
A.R.A.
had
invoiced
Supply
and
Services
Canada
for
fees
in
the
amount
of
$100,000,
the
limit
stipulated
in
the
contract.
Mr.
Glow
vacated
his
suite
at
the
Holiday
Inn,
sold
his
car,
packed
up
his
"soft
furnishings"
and
some
artwork,
textiles
and
other
souvenirs
that
he
had
acquired
and
returned
to
Canada.
Counsel
submits
that,
when
the
plaintiff
left
Canada
in
July,
1976,
he
ceased
to
be
a
resident;
that
he
intended
to
establish
an
international
consulting
business
and
work
as
an
expatriate
consultant
in
developing
countries;
that
he
had
"committed
himself
to
a
life
outside
Canada";
that
he
lived
like
an
expatriate
in
Nigeria,
entering
fully
into
Lagos
social
life
mingling
with
native
Nigerians
and
other
expatriates
and
that
the
normal
and
customary
course
of
his
personal
and
work
life
was
Lagos
not
Canada.
His
return
to
Canada
in
December,
1977
was
unforseen;
he
had
intended
to
remain
abroad
but
he
had
misjudged
the
“lead
time”
required
to
develop
an
international
practice
and
could
not
carry
the
financial
burden
of
staying
in
Nigeria
without
work.
Because
he
had
ceased
to
be
a
resident
of
Canada
in
July,
1976,
his
taxable
income
was
to
be
computed
according
to
section
115
of
the
Income
Tax
Act,
and
the
income
earned
under
the
contract
did
not
constitute
“income
from
employment
performed
in
Canada”,
nor
"income
from
a
business
carried
on
in
Canada"
and
was
therefore,
not
required
to
be
included
in
his
income.
Counsel
then
referred
me
to
the
following
well
known
passages
which
appear
at
pages
70
and
64
(D.T.C.
813
and
816)
of
the
Supreme
Court's
decision
in
Thomson
v.
M.N.R.,
[1946]
S.C.R.
209,
[1946]
C.T.C.
51,
2
D.T.C.
812:
.
.
.
one
is
"ordinarily
resident"
in
the
place
where
in
the
settled
routine
of
his
life
he
is
regularly,
normally
or
customarily
lives.
.
.
.
residence
.
.
.
is
chiefly
a
matter
of
the
degree
to
which
a
person
in
mind
and
fact
settles
into
or
maintains
or
centralizes
his
ordinary
mode
of
living
with
its
accessories
in
social
relations,
interests
and
conveniences
at
or
in
the
place
in
question.
Having
said
as
much,
it
is
a
generally
accepted
proposition
that,
for
taxation
purposes,
a
taxpayer
must
reside
somewhere.
See
Rogers
v.
I.R.C.
(1879),
1
Tax
Cas.
225
(Scot.
Ct.
of
Ex.).
The
narrow
issue
before
me
is
whether
or
not
the
plaintiff
had
ceased
to
be
a
resident
of
Canada
in
July,
1976,
and
become
a
resident
of
Nigeria.
In
any
case
where
the
issue
is
the
residence"
of
a
taxpayer,
the
resolution
will
depend
primarily
on
the
facts
of
the
particular
case
to
be
determined
by
reference
not
to
any
one
single
criterion,
but
rather
by
reference
to
the
cumulative
effect
of
multiple
criteria.
I
am
mindful
of
the
fact
that
the
concept
of
residence"
does
not
require
constant
personal
presence
of
the
taxpayer.
See
Re
Young
(1875),
1
Tax
Cas.
57
(Scot.
Ct.
of
Ex.).
Having
regard
to
all
the
pertinent
facts
in
the
present
case,
I
am
not
satisfied
that
the
plaintiff
ceased
to
be
a
resident
of
Canada
in
July,
1976.
While
he
may
have
had
a
fervent
desire
to
live
and
work
outside
Canada,
he
did
not
sever
his
ties,
nor
did
he
establish
any
significant
or
permanent
ties
connecting
him
to
Nigeria.
I
agree
with
the
plaintiff's
submissions
that
it
was
not
necessary
for
Mr.
Glow
to
cancel
his
credit
cards
and
bank
accounts,
roll
over
his
RRSPs,
and
divest
himself
of
all
property
(real
and
personal)
in
order
to
satisfy
me
that
he
had
ceased
to
be
a
resident
of
Canada.
See
Beament
v.
M.N.R.,
[1952]
C.T.C.
327,
52
D.T.C.
1183
(S.C.C.),
Griffiths
v.
The
Queen,
[1978]
C.T.C.
372,
78
D.T.C.
6286
(F.C.T.D.),
and
The
Queen
v.
Bergelt,
[1986]
1
C.T.C.
212,
86
D.T.C.
6063
(F.C.T.D.).
I
am
also
satisfied
that
a
long
absence
from
Canada
is
not
necessary
in
order
for
a
taxpayer
to
cease
to
be
a
Canadian
resident,
The
Queen
v.
Bergelt,
supra.
Similarly,
the
fact
that
the
taxpayer's
remuneration
for
work
in
a
foreign
country
is
deposited
in
a
Canadian
bank
account
is
not
of
itself
determinative
of
the
issue
of
residency;
see
Marois
v.
M.N.R.,
(unreported),
T.C.C.
Notwithstanding,
he
still
has
to
establish
that
he
had
no
legal
ties
to
Canada.
This
he
has
failed
to
do.
He
never
did
sever
the
business
relationships
he
had
established
in
Canada.
The
"Amendment
to
Shareholders
Agreement"
dated
January
1,
1977
(defendant's
exhibit
#7)
indicates
that
he
retained
his
shares
in
A.R.A.
as
well
as
the
right
to
use
the
trade
name
"A.R.A.
Consultants
Ltd."
and
to
hold
himself
out
as
an
associate.
He
remained
an
officer
and
director
of
the
company.
Counsel
submitted
that
this
was"
more
nominal
and
symbolic
than
real";
he
alleges
that
what
was
significant
is
the
fact
that
the
plaintiff
withdrew
from
the
Toronto
branch
of
A.R.A.,
which
was
his
sole
source
of
income,
and
that
from
July
9,
1976
(my
reading
of
the
agreement
indicates
October,
1976)
until
January,
1978,
he
had
no
financial
participation
or
responsibility
with
respect
to
the
business.
That
may
be
so,
but
that
does
not
mean
that
he
relinquished
his
interest
in
the
business.
The
agreement
with
his
partner
clearly
indicates
that,
for
the
intervening
period,
they
were
going
their
separate
ways
and
that
Mr.
Glow
would
not
be
entitled
to
a
share
of
any
moneys
earned
by
Mr.
Stanley;
nor
would
be
liable
for
any
costs
incurred
by
him
and
vice
versa.
It
is
clear
from
the
numerous
communications
between
the
parties
during
the
course
of
his
absence,
that
Mr.
Glow
remained
very
interested
in
the
activities
of
the
Toronto
branch;
he
constantly
enquired
as
to
the
contacts
that
were
being
made,
contracts
that
were
being
bid
on
as
well
as
bank
balances
and
other
activities.
I
am
not
prepared
to
accept
that
this
was
merely
a“
natural
interest
by
Mr.
Glow
in
how
his
former
colleagues
were
doing";
that
he
had
divested
his
business
life,
both
in
mind
and
fact,
from
Toronto
and
that
it
was
now
centred
in
Nigeria.
The
following
facts
substantiate
the
defendant's
position
which
contradicts
the
plaintiff's
approach.
The
defendant
submitted
as
Exhibits
6,
7
and
9
documents
which
revealed
that,
as
of
January
1,
1977,
the
plaintiff
consented
to
the
admission
of
Mr.
John
Renner
as
a
fifth
shareholder
in
A.R.A.;
he
transferred
50
of
his
shares
to
Mr.
Renner;
Mr.
Renner
was
to
join
the
Toronto
branch
and
share
its
profits
with
Mr.
Stanley
until
the
plaintiff's
return
to
Canada
in
January,
1978,
at
which
time
a
new
agreement
would
be
executed
giving
each
of
them
a
one-third
interest
in
the
profit
centre.
Further,
when
the
Toronto
branch
moved
its
offices
in
1977,
space
was
set
aside
for
Mr.
Glow
and
his
office
furniture
was
purchased
in
August,
1977.
The
logical
inference
from
these
facts
is
that
Mr.
Glow's
withdrawal
was
only
temporary.
At
no
time
during
his
stay
in
Nigeria
did
Mr.
Glow
hold
himself
out
to
be
an
independent
consultant.
Letters
from
him
in
May
of
1977
indicate
that
he
began
actively
promoting
A.R.A.
in
Nigeria
and
he
instructed
his
colleagues
to
prepare
a
brochure
in
order
to
advertise
A.R.A.
in
Nigeria.
His
professional
life
aside,
Mr.
Glow
had
personal
ties
in
Canada,
his
friends,
his
family
and
more
particularly
Ms.
Dorion
who
had
accompanied
him
to
Nigeria
and
who
had
been
a
part
of
his
life
for
over
a
year
before
their
departure.
Counsel
for
the
plaintiff
suggested
that
the
fact
that
Ms.
Dorion
left
Canada
with
Mr.
Glow
in
July,
1976
should
be
regarded
as
another
significant
factor
supporting
the
contention
"that
he
then
ceased
to
be
a
Canadian
resident".
I
do
not
agree.
A
careful
review
of
her
evidence
discloses
that
prior
to
leaving
Canada
Ms.
Dorion
had
just
completed
the
third
of
a
four
year
environmental
studies
program
at
the
Ontario
College
of
Art.
She
had
arranged
for
a
semester
of
independent
study
in
this
program
and
was
permitted
to
study
traditional
building
methods
in
Nigeria.
To
obtain
her
credit
for
the
semester
she
was
required
to
make
a
presentation
at
the
college
in
January,
1977.
Her
spring
semester
was
completed
in
Toronto.
During
that
period
she
had
applied
for,
and
obtained,
a
student
loan.
She
returned
to
Nigeria
in
the
summer
of
1977
but
in
September
she
came
back
to
Canada
to
attend
the
University
of
Toronto
where
she
began
a
degree
program
in
architecture.
Application
for
and
being
accepted
into
this
program
was
not
a
spur
of
the
moment
occurrence.
It
is
obvious
to
me
that
Ms.
Dorion
had
committed
herself
to
return
to
Canada.
Much
was
made
of
Mr.
Glow’s
stated
intention
to
live
and
work
in
Nigeria
after
the
expiry
of
the
contract;
that
he
did
not
intend
to
return
to
Canada
and
did
so
only
out
of
financial
necessity.
Unquestionably,
it
is
in
the
taxpayer's
interest
to
avow
that
he
has
severed
his
residential
relations
with
Canada.
Unfortunately,
his
stated
intention
is
not
supported
by
the
evidence.
The
record
shows
that
he
was
in
constant
contact
with
his
friends
and
associates
in
Canada.
Approximately
30
letters
between
Mr.
Glow
and
his
associates
at
A.R.A.,
were
submitted
as
evidence
by
the
defendant.
A
few
excerpts
from
these
letters
bear
repeating:
1.
Letter
stamp
dated
as
received
August
5,
1976,
from
Mr.
Glow:
Its
just
started
to
hit
us
that
we
will
be
away
for
a
year
or
more—and
that
we’re
going
to
Africa.
.
.
.
Did
anyone
call?
Does
anyone
miss
me?
[Emphasis
added.]
2.
Copy
of
letter
dated
November
11,
1976
from
Mr.
Glow:
Around
March
when
I
plan
to
come
back
for
a
visit
I’m
going
to
try
to
assess
whether
these
people
are
getting
anything
for
all
the
money
they
are
spending
on
me.
If
there
doesn't
look
like
there
will
be
anything
to
show
for
my
work
here
I
might
think
about
coming
home
a
bit
early.
[Emphasis
added.]
3.
Copy
of
letter
dated
December
13,
1976
from
Mr.
Glow:
I'm
looking
forward
to
my
trip
home
in
March.
(If
you
have
a
5
or
6
month
assignment
for
me
then
it
wouldn't
be
all
that
difficult
to
convince
me
to
stay)
[Emphasis
added.]
At
no
time,
did
he
seek
to
extend
his
visa
or
pay
any
form
of
tax
on
his
income
in
Nigeria.
His
actions
during
his
stay
abroad
are
consistent
with
someone
living
out
of
the
country
for
a
predetermined
period
while
completing
an
overseas
service
contract
rather
than
someone
who
has
taken
up
foreign
residence
having
no
intention
whatsoever
to
return.
One
further
note,
counsel
for
the
plaintiff
submitted
that
the
facts
in
the
present
case
were
analogous
to
those
in
S./.M.
v.
M.N.R.
(1989),
91
N.R.
66
(F.C.A.).
That
case
involved
the
question
of
whether
or
not
38
missionaries
employed
by
S.I.M.
Canada
normally
resided
in
Canada
within
the
meaning
of
the
Unemployment
Insurance
Regulations.
The
missionaries
worked
abroad
usually
as
a
husband
and
wife
team
and
they
would
take
their
children
with
them.
While
abroad,
they
lived
in
homes
owned
by
S.I.M.
Canada.
The
average
length
of
service
was
1412
years.
They
would
periodically
return
to
Canada
on
furloughs.
The
Court
of
Appeal
held
that
the
missionaries
were
normally
resident
in
the
foreign
country
where
they
worked
and
that
their
furloughs
constituted
a
"temporary
sojourn”
that
did
not
result
in
the
resumption
of
residence
in
Canada.
The
facts
in
the
present
case
are
clearly
distinguishable.
When
Mr.
Glow
left
Lagos,
there
was
no
permanent
place
of
abode
to
which
he
could
return,
nor
did
he
have
a
job
to
return
to.
In
summary,
after
an
objective
overall
review
of
the
evidence,
I
am
unable
to
conclude
other
that
this
is
a
case
of
a
Canadian
resident,
who
like
many
others,
aspired
to
a
career
abroad.
He
was
fortunate
to
have
obtained
a
contract
for
a
limited
duration
in
a
foreign
country.
He
retained
numerous
ties
in
Canada
and
immediately
upon
the
termination
of
the
foreign
undertaking
he
returned
to
this
country.
While
abroad,
he
adapted
only
those
conditions
in
Nigeria
which
were
sufficient
and
adequate
to
permit
him
to
enjoy
an
acceptable
lifestyle.
He
did
not
in
any
way
establish
any
significant
ties
in
Nigeria
nor
were
there
any
de
facto
indications
of
integration
within
that
society.
Accordingly,
this
appeal
is
dismissed.
Costs
to
the
defendant.
Appeal
dismissed.
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