[OFFICIAL ENGLISH TRANSLATION]
Date: 20020118
Docket: 2000-3983(IT)I
BETWEEN:
KATHLEEN CLARK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal for the 1996,
1997 and 1998 taxation years.
[2] The issues to be decided are as
follows:
(a) whether the appellant was
the individual eligible to receive the child tax benefit for
Nicolas for the 1996, 1997 and 1998 base taxation years;
(b) whether the Minister of National
Revenue ("the Minister") was justified in issuing to
the appellant the notices of determination of child tax benefit
dated May 19, 2000, for the 1996, 1997 and 1998 base
taxation years;
(c) whether the Minister was justified
in issuing to the appellant the notices of determination of goods
and services tax credit dated May 19, 2000, for the 1997 and
1998 base taxation years.
[3] In issuing the notices of
determination of child tax benefit dated May 19, 2000,
for the 1996, 1997 and 1998 base taxation years and the notices
of determination of goods and services tax credit for the 1997
and 1998 base taxation years, the Minister assumed the following
facts:
[TRANSLATION]
(a) the appellant
and Gérald Tremblay (hereinafter "the former
spouse") were married on June 11, 1977;
(b) they have five
children: Éric, who was born in June 1978, Nicolas, who
was born in October 1981, Marie-Ève, who was born in
December 1982, Vanessa, who was born in September 1989, and
Maxime, who was born in September 1993;
(c) the appellant
and the former spouse stopped living together on July 1,
1994;
(d) a judgment
rendered by the Honourable Mr. Justice
Frank G. Barakett of the Superior Court of
Québec on August 25, 1995, gave the appellant
custody of three children: Maxime, Vanessa and
Marie-Ève;
(e) the same
judgment rendered by the Honourable Mr. Justice
Frank G. Barakett of the Superior Court of
Québec on August 25, 1995, gave the former
spouse custody of two children: Éric and Nicolas;
(f) on January
30, 1996, the Honourable Mr. Justice Gérard Boisvert
of the Superior Court of Québec rendered a judgment
divorcing the appellant and the former spouse and ratified a
corollary relief agreement providing that:
(i) the
appellant had custody of three children: Maxime, Vanessa and
Marie-Ève;
(ii) the former
spouse had custody of two children: Éric and
Nicolas;
(g) on April 18,
1996, the Honourable Mr. Justice Frank G. Barakett of
the Superior Court of Québec ratified an agreement on a
motion for a child custody variation order providing that:
(i) the
appellant would have custody of three children, Éric, who
was going to be 18 years old in June, Vanessa and Maxime;
(ii) the former
spouse would have custody of one child, Nicolas;
(iii) the appellant
and the former spouse would have joint custody of
Marie-Ève, that is, from 4:00 p.m. on Monday until
8:00 a.m. on Friday for the former spouse and from
8:00 a.m. on Friday until 4:00 p.m. on Monday for the
appellant;
(h) on November 16,
1999, the Minister sent the appellant and the former spouse
questionnaires for them to fill out;
(i) after
reviewing the respective questionnaires filled out by the
appellant and the former spouse, the Minister determined that the
appellant was not the individual eligible to receive the child
tax benefit for Nicolas for the 1996, 1997 and 1998 base taxation
years;
(j) the
Minister therefore adjusted the CTB for the 1996, 1997 and 1998
base taxation years and the GST credit for the 1997 and 1998 base
taxation years accordingly.
[4] The relevant legislative
provisions are sections 122.5, 122.51, 122.6 to 122.64, 152 and
248 of the Income Tax Act ("the Act") and
sections 6300 and 6302 of the Income Tax Regulations
("the Regulations"), as amended and as they
applied for the base taxation years at issue.
[5] To enjoy the rights and benefits
provided for in the Act, a person must be the parent who
primarily fulfils the responsibility for the care and upbringing
of the qualified dependant. Although the appellant was the mother
during the years involved, there is no ambiguity that she did not
meet the requirements of the Act. This is moreover very
clear from the agreement, which leaves no possible room for
doubt.
Corollary relief agreement of January 3, 1996
[TRANSLATION]
7. The
applicant shall have custody of Marie-Ève, Vanessa and
Maxime;
8. The
respondent shall have custody of Éric and Nicolas,
although the applicant declares that she is prepared to take
custody of them if need be and reserves her recourse in this
regard;
. . .
- Support
7. The
respondent shall pay the applicant $50 a month in support for her
and his children Éric, Marie-Ève, Vanessa and
Maxime in accordance with the Act to facilitate the payment of
support;
- Access rights
8. Access
rights shall be exercised as follows:
-
The respondent shall have Vanessa and Maxime, of whom the
applicant has custody, every other weekend from 7:00 p.m. on
Friday until 7:00 p.m. on Sunday and at least one day each
week as mutually agreed by the parties;
-
Éric shall see his father once or twice a week when it is
convenient for him;
-
Nicholas shall see his mother once or twice a week when it is
convenient for him;
-
During the Christmas season, the parties shall also divide up the
Christmas vacation, and the children shall spend one of the two
holidays with each of them;
-
During the summer, the children shall spend two (2) weeks with
their father and shall be registered for Patro activities during
their vacation; the choice of weeks of vacation and the children
to accompany him shall be made by agreement between the
parties;
-
Other access rights shall be exercised as mutually agreed by the
parties;
Ratification of the agreement by the judgment - April 18,
1996
[TRANSLATION]
. . .
FOR THESE REASONS, the COURT:
RATIFIES and GIVES EFFECT to the agreement duly signed by the
parties on April 12, 1996, by amending paragraph 7 and setting
the support payable by the respondent to the applicant at $70 a
month, the whole in accordance with the Act to facilitate the
payment of support;
THE WHOLE with each party paying his or her own costs.
. . .
Agreement of April 12, 1996
[TRANSLATION]
. . .
CUSTODY OF THE CHILDREN
2. The
applicant shall have custody of Éric, Vanessa and
Maxime;
3. The
respondent shall have custody of Nicolas;
4. The parties
shall have joint custody of the minor child
Marie-Ève, aged 13;
5. The parties
shall exercise joint parental authority over their minor child
Marie-Ève;
6. Joint
custody of Marie-Ève shall be implemented as follows:
-
The respondent shall have custody of Marie-Ève from 4:00
p.m. every Monday until 8:00 a.m. on Friday of the same week;
-
The applicant shall have custody of Marie-Ève from
8:00 a.m. every Friday until 4:00 p.m. on the following
Monday;
. . .
[6] The documentary evidence is very
clear and unambiguous as regards responsibility for the care and
upbringing of Nicolas. At the start of the hearing, I pointed out
that the documentary evidence seemed so conclusive that I
considered it impossible to discharge the burden of proof
required for the appeal to be well-founded.
[7] Following my remarks, the
appellant testified and explained, with emotion, the entire
context and the circumstances surrounding the divorce proceedings
and the signing of the agreement. She did not submit any fact
that could discredit the documentary evidence.
[8] Basically, she asked that the
claim resulting from the notices of determination for both the
child tax benefit and the goods and services tax credit be
cancelled.
[9] The evidence showed that the
appellant lived very modestly; her only income came from welfare
benefits, which were a bare minimum that no doubt met only part
of the basic needs of the family, for which she was solely
responsible.
[10] The assessment that led the Minister to
claim a few thousand dollars is having such a profound effect on
the family budget that it is tragically leading to
destabilization.
[11] Obviously, this fact alone makes the
appellant's case very deserving of sympathy, especially since
the agreement was signed in good faith and ratified by the
Honourable Mr. Justice Frank G. Barakett of the Superior Court of
Québec.
[12] This is another case in which the
support recipient is suffering the difficult and absolutely
disastrous consequences of the review of her file, no doubt on
the initiative of the support payer, who, for various reasons,
decided to seek the application of the Act's
provisions that give him a benefit equivalent to the claim made
against the other spouse after he waived that benefit by means of
an agreement that is nevertheless totally binding on him.
[13] To avoid such a situation, which is
often disastrous, the respondent should review her administrative
practice to ensure that any person affected by the review of a
support file is informed so that he or she can quickly initiate
proceedings to mitigate the consequences of his or her particular
spouse's about-face when by their own doing the parties
themselves entered into an agreement that clearly sets out each
party's responsibilities.
[14] An agreement, no matter how clear, has
no effect against the Minister if it contains provisions contrary
to the Act's provisions; in other words, an agreement
that binds the signatories does not bind the Minister against
whom it cannot be raised. In the case at bar, although the
appellant's former spouse waived rights under the Act
through an agreement, this had no effect on the Minister's
obligation to pay him all the benefits resulting from the
Act. The Minister could not ignore or disregard reality.
The appellant's former spouse did indeed have custody of the
child in respect of whom the benefits were paid.
[15] Although the consequences may be
disastrous for the appellant in balancing her budget, neither the
Department of National Revenue nor this Court can disregard the
Act's provisions, which are very clear on this point,
on humanitarian or fairness grounds.
[16] Allowing the appeal would have the
effect of validating obvious non-compliance with the
Act's provisions; I have neither the power nor the
authority to do so, which is why I must dismiss the appeal.
Signed at Ottawa, Canada, this 18th day of January 2002.
J.T.C.C.
Translation certified true
on this 23rd day of April 2003.
Sophie Debbané, Revisor
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