Citation: 2008 TCC 417
Date: 20080808
Docket: 2007-4337(IT)I
BETWEEN:
DEBORAH ANN NEDELCU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the Appellant: The Appellant herself
Counsel for the
Respondent: G. Boyd Aitken
REASONS FOR JUDGMENT
(Delivered
orally from the Bench
on April 17, 2008, in London, Ontario.)
McArthur J.
[1]
The Appellant appeals
the Minister of National Revenue's redetermination to the effect that she is
not entitled to receive $23,406 in child tax benefit (“CTB”) payments covering
the period from July 2004 to August 2007, applicable to the 2003, 2004 and 2005
base taxation years.
[2]
The issue is whether the
Appellant was a resident of Canada during the base years under appeal. If she
does not meet one of the deeming provisions in subsection 250(1) of the Income
Tax Act, such as sojourning in Canada for 183 days
or more in a taxation year; or coming within subsection 253(3), she is not
ordinarily resident in Canada during the relevant years.
[3]
She was born in South
Africa, Zimbabwe, in 1964. When she was 15 years old, she
came to Canada and resided in London,
Ontario. In 1987, she moved to Toronto where she worked for the University of Toronto, and for the financial institution of
Burns Fry. She married in 1988, residing in Toronto
until she moved to Bucharest, Romania in 1993 with her husband and three
children who were born in Toronto in August 1990, September 1991 and January
1993. She had a fourth child born in Romania in April
1994.
[4]
They moved to Romania to care for her husband's elderly parents and to
establish a business in that country. The parents passed away, I believe, over
three years ago.
[5]
During the hearing, she
stated that her husband was establishing a transportation business in Romania and in a letter to Canada Revenue Agency from that
country, in about September 2006, she stated:
We are trying to establish a business in Romania which would enable
us to provide services to foreign nationals visiting Romania while living in Canada.
We were given no details of these businesses other
than that her husband has been trying to establish one of them since 1993.
[6]
We do know that she and
her family have been living in Romania since 1993 in the home of her husband's
parents or grandparents, which was repossessed after the fall of the Communist
Regime.
[7]
Up to the relevant
years she had been receiving CTB for her four children since 1993. The Minister
had advised the Appellant by letter in August 2000 that she and her family
would be considered factual residents of Canada.
There lies, I believe, the central submission of the Appellant. She states
that her and her family's factual situation did not change, yet the Minister reversed
itself by notice of redetermination dated September 20, 2006. I have no doubt that
the Canada Revenue Agency was entitled to reverse the earlier decision and
there is no question of estoppel.
[8]
The Appellant’s reasons
for appeal state:
In 2000, my family's residency status was reviewed by Revenue Canada
and were found to be “factual residents of Canada for taxation purposes”. We were living in Romania but continued to maintain our ties with Canada.
As a result of the response we received for the 2000 assessment (August
16, 2000) and a letter from Revenue Canada dated April 8, 2002, both stating that
we were factual residents of Canada, I continued to file my annual tax returns
for 2002, 2003, 2004 and 2005. Nothing has been deleted from the list of ties
we had with Canada in 2000 and which were accepted by Revenue Canada as sufficient evidence of residency.
…
Taking into consideration a number of previous decisions by the Tax
Court of Canada in the past, I feel the assessment by Revenue Canada has been superficial.
…
Although I live in Romania, I have always been a non-resident in Romania and have only a temporary residency visa which is valid for only
one year and requires renewal annually.
I do not own a permanent home or property in Romania or anywhere else. The building
I live in belongs to my husband and was acquired as an inheritance after restitution
by the courts from the Government of Romania following the downfall of the
Communist Regime.
…
I am the mother of four school-aged children (all Canadian citizens
with valid Canadian passports) and am not employed outside of my home.
…
Canadian bank accounts enable me to make payments for various
insurance policies.
[9]
I believe she uses the
proceeds of the CTB for these payments and I believe that is the only amounts
that go into those accounts.
[10]
Under the heading of "Visits and
Families Ties" in the Notice of Appeal, the Appellant states:
We have encouraged the family's ties and contact with Canada by
arranging annual visits to Canada. The children have great grandparents, grandparents, aunts, uncles
and cousins in many parts of Canada. My family has a long heritage in Ontario and we do not wish to permanently sever those roots for our family.
The cost of traveling as a family of six are prohibitive and the compromise we
have reached is that we send two children each year with the family visiting
every third year. We returned to Canada in the years 2000, 2001, 2003-2004, 2005.
[11]
The Minister concludes
in his Reply, that the Appellant is not entitled to receive CTB payments. In
the Reply, it is stated:
25 … The Appellant is not eligible to receive GSTC payments in the
amount of $602. …
26 …the Appellant is not entitled to receive CTB payments … as the
Appellant was not an ‘eligible individual’ as stated in paragraph (c) under the
definition of said term in section 122.6 … because she was not a resident.
[12]
During the relevant
years, the Appellant had been living for over 10 years in Romania where she was and is a full-time wife and mother. She
visited Canada, particularly London, Ontario, at best a total of 50 days during the three relevant
years. She did have relatives here with whom she stayed, but no business or
residence. Her immediate family was well established in Romania where she still lives. She does not know when she
might return to Canada, if at all, with any permanency.
[13]
The assumptions of fact
relied on by the Minister are of little assistance. They are contained in
paragraph 22 of the Reply. Paragraph (a) sets out the dates of birth of the Appellant's
children. Paragraphs (b), (c) and (d) read:
(b) prior to November 1, 1993, the Appellant resided in Toronto, Ontario;
(c) on November 1, 1993, the Appellant moved
to Bucharest, Romania with her
spouse and children; and
(d)
at all material times, the Appellant was not a
resident of Canada.
[14]
In the case of Thomson
v. The Minister of National Revenue,
Rand, J. stated:
For the purposes of income tax legislation, it must be assumed that
every person has at all times a residence. It is not necessary to this that he
should have a home or a particular place of abode or even a shelter. He may
sleep in the open. It is important only to ascertain the spatial bounds within
which he spends his life or to which his ordered or customary living is
related. Ordinary residence can
best be appreciated by considering its antithesis, occasional or casual or deviatory
residence. The latter would seem clearly to be not only temporary in time and
exceptional in circumstance, but also accompanied by a sense of transitoriness and
of return.
But in the different situations of so-called “permanent residence”, “temporary
residence”, “ordinary residence”, “principal residence” and the like, the
adjectives do not affect the fact that there is in all cases residence; and
that quality 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…
This
reasoning applies to the present case and, in particular, Justice Rand’s
following sentence:
…It is important only to ascertain the spatial bounds within which
he -- and I will say "he or she" -- spends his or her life or to
which his or her ordered or customary living is related. …
[15]
Here we have an Appellant
who packed up all she owned but for a few unneeded items from her mother, and
moved with her husband and children to Romania
more than 10 years before the period in question. She had her fourth child in Romania.
[16]
All the children are
enrolled, and during the relevant years were enrolled, in school there as they
still are. They all live as a family in her husband's home which obviously is
the family home. He has a business in Romania with little or no known ties to Canada. Surely, Romania is the
spatial bounds within which she spends her life to which her ordered or
customary living is related.
[17]
To continue with Rand,
J.'s criteria, considering the antithesis to Romania,
which is Canada, I find she visits here occasionally,
perhaps 50 days over a 1,000‑day period being the relevant one before us.
She has relatives here but no residence, property or means of support other
than the CTB. She stated that she did not know when she would return to Canada although she would like her children to attend
university here.
[18]
In Laurin v. Her
Majesty the Queen,
the Appellant was a pilot with Air Canada,
retired in 2000 and was a Canadian citizen. He purchased annual residency
permits in a foreign island and leased an apartment. He used Florida as a mailing address. He and his common-law spouse
built a home in Quebec which the Minister claimed remained
available to him. This relationship ended in 1993. He opened bank accounts
in islands in 1996 and he closed all but one in Canada
in 1993. He never spent more than 183 days in any taxation year in Canada. He filed and was assessed as a non-resident of Canada. It was held that he had severed his residential ties
in Canada. He did not sojourn in Canada more than 183 days. He was not ordinarily a
resident in Canada.
[19]
In the case of Laurin,
the Appellant was an employee of a Canadian company, Air Canada, and had
three children all over the age of 20 years, living in Canada.
He also used Canadian medical services. Judge Bowman found the Appellant had
neither a mailing address in Montreal, nor did he establish a sense of
permanency at any one of the homes of his three hosts during his stays in Montreal. Furthermore, the evidence adduced demonstrated that
he did not have any investments or business activities in Canada. On two occasions when he stayed in Montreal, such cases were for medical reasons. The Crown's
position presently is much stronger than in the case of Laurin.
[20]
Without hesitation, I
conclude that in the present case the Appellant was not a resident in Canada in the 2003, 2004 and 2005 taxation years, and the
appeals are dismissed.
Signed at Ottawa, Canada, this 8th
day of August 2008.
“C.H. McArthur”
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