Citation: 2010 TCC 394
Date: July 27, 2010
Docket: 2009-2458(IT)I
BETWEEN:
STEPHEN PAUL WHITE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Little J.
A. FACTS
[1]
The Appellant and his
former common-law spouse, Lacey Bishop (“Ms. Bishop”), are the parents of
three children (hereinafter “the Children”). The Children are minors. The
daughter was born in 1999. The twin boys were born in 2001.
[2]
The Appellant and Ms.
Bishop have joint custody and guardianship of the Children.
[3]
By Notice dated January
20, 2009, the Minister of National Revenue (the “Minister”) notified the
Appellant that he was entitled to Canada Child Tax Benefits (“CCTBs”) of
$544.19 per month for the period from January to May 2009 inclusive and
$544.28 for the month of June 2009 of the 2007 Base Taxation Year.
[4]
The Minister’s Reply
states that by Notice dated March 20, 2009, the Minister notified the
Appellant that his entitlement to CCTBs for the 2007 Base Taxation Year had
been redetermined on the basis of a change to his number of eligible
children (underlining added). The Reply also says that the Minister
requested that the Appellant repay overpayments of CCTBs totalling $1,088.38
for the period from January 2009 to February 2009 (the “Period”) of the 2007
Base Taxation Year.
[5]
The Appellant filed a
Notice of Objection on April 27, 2009 to the Minister’s redetermination.
B. ISSUE
[6]
The issue is whether
the Minister properly determined the Appellant’s claim for the CCTBs for the
Period.
C. ANALYSIS
[7]
During the hearing, the
following Orders were filed:
(a) a Consent Order
issued by Judge Dossa of the Provincial Court of British Columbia dated
the 5th day of November, 2003. In that decision, Judge Dossa ordered, in part,
as follows:
1. the parties shall have joint custody and
guardianship of the person and of the estate of the Children;
2. the Applicant, Lacey Bishop, shall have
primary residence of the Children for the purpose of obtaining the child
tax credit and benefits;
3. the Respondent, Stephen White shall have
access to the Children on his scheduled days off for three consecutive nights
commencing with pick up at 11:00 a.m. on his first day off and returning
the Children on the fourth day at 7:00 p.m., which is his last day off;
4. the Respondent, Stephen White shall be
entitled to such further and other access to the Children as is agreed upon
between the parties with such consent not to be unreasonably withheld and that
the Respondent, Stephen White shall provide the Applicant, Lacey Bishop
with five days notice of his request;
5. the parties shall equally share holidays
with the Children;
6. the Respondent, Stephen White shall pay to
the Applicant, Lacey Bishop retroactive support for the Children in the
sum of $600.00 per month from August 2, to October 2, 2003, inclusive for a
total of $1,800.00 with such monies to be payable forthwith and no later than
November 30, 2003;
7. the Respondent, Stephen White shall pay to
the Applicant, Lacey Bishop the sum of $990.00 per month for the support
of the Children, payable on the 2nd day of each and every
month, commencing November 2, 2003 and continuing for so long as the Children
remain as children of the marriage as defined by the Family Relations Act;
8. the Respondent, Stephen White shall pay
75% and the Applicant, Lacey Bishop shall pay 25% of the extraordinary expenses
relating to the Children;
9. the Respondent shall provide medical and
dental insurance coverage for the Applicant, Lacey Bishop for so long as it is
available through his employment;
…
(Exhibit R-1, Tab 1)
(b) On Friday, the 28th
day of July 2006, Judge Borowicz of the Provincial Court of British
Columbia issued an Order and Reasons for Judgment:
THIS COURT ORDERS that Stephen White shall pay to Lacey Bishop
the sum of $500 per month commencing August 1, 2006 and payable on the 1st
day of each and every month thereafter, until further Court Order or agreement
of the parties, child support for the children:
[…, …, …]
(the
“children”)
THIS COURT FURTHER ORDERS that each of the parties shall provide to
the other full disclosure of their financial circumstances on or before June 1,
2007 and thereafter annually so long as child support is payable.
THIS COURT FURTHER ORDERS that Stephen White may not impose his
religious preferences on Lacey Bishop and, unless Lacey Bishop agrees, the
children are to attend public school and Lacey Bishop may register the children
at the public school nearest her residence.
THIS COURT FURTHER ORDERS that Stephen White is not to register the
children at Catholic school without the written permission of Lacey Bishop.
(Exhibit A-1, Tab 3)
[8]
At page 10 of her
decision, Judge Borowicz said:
Both parents are providing a primary residence for themselves and
their children. Mr. White, however, has a more favorable financial base than
Ms. Bishop. This distinction was also recognized in the Consent Order of
2003. At that time, while not expressly stating that the parents shared custody
for the purposes of determining their support obligations, Ms. Bishop was given
the primary designation for the purpose of obtaining the Child Tax Credit and
Benefits. That was fitting then and remains so now.
[9]
At page 11, Judge
Borowicz said:
In this case, the parents have shared parenting from the outset,
with Mr. White bearing a greater proportionate responsibility for expenses
because, then as now, Ms. Bishop has a lesser income-earning ability. Overall,
however, this is without doubt a functionally shared parenting situation. …
[10]
The burden of proof is
on the Appellant who must establish on the balance of probabilities that he is
the parent who primarily fulfilled the care and upbringing of the Children for
the months of January and February 2009.
[11]
I have reviewed the
evidence very carefully and I have the following comments:
(a) The Appellant filed a number of
documents under Exhibit A-1. Exhibit A-1 contains a copy of a letter to the
Appellant from Christine Eyjolfson of the Canada Revenue Agency (the “CRA”),
dated January 5, 2004. The letter reads as follows:
We have carefully reviewed the information that you and another
person have provided about the care and upbringing of [the children]. As a
result, we have determined that they reside with each of you, and you are both
equally involved in their care and upbringing. Consequently, we intend to
alternate the Canada Child Tax Benefit (CCTB) eligibility between you, on a 6‑month
rotation, commencing January 1, 2004.
As a result, the Canada Child Tax Benefit (CCTB) eligibility will
alternate according to the following schedule:
-
you will be eligible to receive the Canada Child
Tax Benefit (CCTB) from January 2004 to June 2004,
-
the other person will be eligible to receive the
benefit from July 2004 to December 2004.
This schedule will continue until each child’s eighteenth birthday,
or until there is a change in either your custody or care situation.
Note: It is not necessary to submit a new application every 6 months,
unless either your care or custody situation changes. We will automatically
rotate the eligibility.
(b) I wish to state that I am in agreement with
the comments made by Christine Eyjolfson, in her letter to the Appellant dated
January 5, 2004, when she said:
… As a result, we have determined that they [i.e. the Children]
reside with each of you, and you are both equally involved in their care
and upbringing. Consequently, we intend to alternate the Canada Child Tax
Benefit (CCTB) eligibility between you, on a 6‑month rotation, commencing
January 1, 2004. (emphasis added)
…
(c) In her letter, Ms. Eyjolfson specifically
stated that the Appellant was to be eligible to receive the CCTBs from January
2004 to June 2004.
(d) According to the evidence, the
Appellant never received any portion of the CCTBs, for the period indicated in
Ms. Eyjolfson’s letter nor for any other period.
(e) Exhibit A-1 also contained a copy
of a letter addressed to the Appellant, dated December 9, 2008, from Mr.
Hayer of the CRA. The letter reads as follows:
We have carefully reviewed the information that you and another
person provided about the care and upbringing of [the children].
As a result, we have determined that they reside with each of you,
and you are both equally involved in the children’s care and upbringing.
Consequently, we intend to alternate eligibility for the CCTB and the child
portion of the GST/HST credit between you, every six months, starting on
January 2009. Please note that a 6-month rotation of eligibility cannot be
established retroactively in share eligibility cases.
When a child resides with two individuals on a more or less equal
basis, and both individuals are responsible for the child’s care and
upbringing, they can only share eligibility for the CCTB and the child
component of the GST/HST credit equally on a six month rotating basis.
As a result, eligibility for the CCTB and the child portion of
the GST/HST credit will alternate according to the following schedule:
-
you will be eligible to receive the benefits
from January 2009 to June, 2009,
-
the other person will be eligible to receive the
benefits from July 2009 to December 2009
This schedule will continue until each child’s 18th birthday for the
CCTB and 19th birthday for the child portion of the GST/HST credit, or until
there is a change in either your custody arrangements or care situation.
Note: It is not necessary to submit a new application every six
months, unless either your custody arrangements or care situation changes.
We will automatically rotate eligibility for the benefits.
…
(emphasis added)
(It should be noted that Mr. Hayer specifically stated
in his letter that the Appellant was to receive the CCTBs from January
2009 to June 2009, i.e., the dates covering the Period in this appeal
(Emphasis added). According to the evidence, the Appellant never received any
portion of the CCTBs for the period indicated in the CRA letter nor for
any other period.)
(f) In my opinion, the position as outlined by
Ms. Eyjolfson and Mr. Hayer in their letters to the Appellant, is a
fair and reasonable approach to resolve disputes involving the allocation of
the CCTBs in this situation.
(g) The Appellant also filed a letter
addressed to the Appellant, dated February 24, 2009, from Diana Townley at the
CRA. The letter reads as follows:
I have reviewed the recent decision made regarding your eligibility
for Child Tax Benefits (CTB) for your children.
My review indicates that you are not entitled to the benefits.
Section 112.6 of the Income Tax Act states that the benefit is paid to the
eligible individual. The “eligible individual” in respect of a qualified
dependant at any time means a person who at that time
a)
resides with the qualified dependant,
b)
is the parent that primarily fulfills the
responsibility for the care and upbringing of the qualified dependant.
In the information previously submitted you indicated that the
access to the children stated in the court order dated November 5, 2003
is being followed. Based on the access granted in the court order, you
do not have the children 50% of the time and therefore, are not considered the
primary care giver of the children.
The rotation of the CTB is a policy developed by the Agency for
situations when each individual is primarily responsible for the children for
equal time periods. As this does not apply in your situation, I will be
cancelling your eligibility for the benefit.
A Notice of Redetermination will be issued in the near future.
(emphasis added)
[12]
It appears from the
comments made by Diana Townley, in her letter dated February 24, 2009, that she
relied upon the Consent Order issued on November 5, 2003. This Consent
Order signed by Judge Dossa contained the following statement:
2. The Applicant, Lacey Bishop, shall have primary
residence of the Children for the purpose of obtaining the child tax credit and
benefits;
(See Exhibit R-1, Tab 1)
[13]
It should be noted that
the decision to determine which party is to receive CCTBs depends upon the
facts for a particular period. The facts that exist today are very different
from the facts which existed when the Consent Order was signed by Judge Dossa
on November 5, 2003.
[14]
I also wish to note
that in his Reply, the Minister made the following statement at paragraph 6:
6. By Notice dated March 20, 2009, the
Minister notified the Appellant that his entitlement to CCTBs for the 2007 base
taxation year had been redetermined on the basis of a change to his number
of eligible children …
(emphasis added)
[15]
I have carefully
reviewed the evidence and there is no evidentiary basis filed with the Court for
the reference to a change to his number of eligible children referred to
in Paragraph 6 of the Reply.
[16]
I have also reviewed
the argument of counsel for the Respondent and there is no reference to the comment
that there was a change to his number of eligible children referred to
in Paragraph 6 of the Reply.
[17]
I have therefore
concluded that the comments referred to in Paragraph 6 of the Reply are
incorrect and cannot be relied upon as a basis for the Reassessment.
[18]
The Appellant also
filed a CRA document entitled “Shared Eligibility” (2008-11-12) (See Exhibit
A-1). In the document the following comment is found:
1. What is shared eligibility?
Shared eligibility exists where a child lives more or less equally
with two separate individuals (whether 4 days with one, and 3 days with the
other, on a one week on, one week off basis or some other similar rotation),
and each individual is primarily responsible for the child’s care and
upbringing when the child resides with them. The Canada Child Tax Benefit
(CCTB) legislation only allows eligibility to one “eligible individual” in a
month. To address this problem, the Canada Revenue Agency (CRA) developed a
shared eligibility policy that would recongnize that there could be two
eligible individuals for the same child. It was therefore decided to allow
eligibility for the child (or children) to each individual on a 6‑month
on, 6‑month off rotation, both for the CCTB and for the child component
of the goods and services/harmonized sales tax (GST/HST) credit.
[19]
Based on the evidence
before me, I believe that this is clearly a situation where there is Shared Eligibility
as referred to in the CRA document. I must state for the record that I was
impressed with the evidence provided by the Appellant on this point of shared
eligibility and I was not impressed with the evidence provided by Ms. Bishop
when she attempted to deny that shared eligibility existed.
[20]
Finally, I wish to note
that there are a number of new facts in 2009 that were not present when the
decisions of Judge Dossa and Judge Borowicz were made.
[21]
When Judge Dossa issued
his decision in 2003, Ms. Bishop had the three Children for whom the Appellant
was the father. After the 2003 court decision, she was the mother of a child
born on January 2, 2005. The father of this child was Mr. Warrington, her
future husband.
[22]
Since that time, Ms.
Bishop gave birth to one other child where her husband, Mr. Warrington, was the
father. Ms. Bishop stated in evidence that she was the caregiver of the
three Children where the Appellant was the father, the two children where Mr.
Warrington was the father, plus two children from Mr. Warrington’s first
marriage (the latter two children on weekends).
[23]
In other words, Ms.
Bishop maintains that she is now the caregiver for seven children, not simply the
three Children who were born at the time of the 2003 Court Action. I
believe this is an important new fact, and it should be considered when
determining the primary caregiver or shared eligibility.
[24]
It should also be noted
that the Appellant testified that his mother and his sister provide him with financial
assistance and other assistance to ensure that he is able to provide the best
possible environment for the Children when they are in his care.
[25]
I wish to state for the
record that I was impressed with the Appellant’s testimony and the testimony of
the Appellant’s mother and the Appellant’s sister. I believe that he is
honest and forthright and that he loves the Children very much. I also
believe that he is doing everything that he can to support the Children.
[26]
I was not impressed
with the evidence of Ms. Bishop when she attempted to establish that she was
the primary caregiver of the three Children.
[27]
I also wish to note that,
it does not appear to be fair, reasonable and proper for the Appellant to do as
much as he does in this situation for the three Children and never receive any
portion of the CCTBs.
[28]
Based on a careful
analysis of the evidence, I have concluded that the Appellant was the primary
care giver of the Children for the months of January 2009 and February
2009 of the 2007 Base Taxation Year.
[29]
The Appeal is allowed, without
costs.
Signed at Vancouver, British Columbia, this 27th day of July 2010.
“L.M. Little”
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