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Date: 20030129
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Docket: 2002-1373(IT)I
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BETWEEN:
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GLORIA EREMITY,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Bowie J.
[1] The Appellant and her husband
separated in 1993, and subsequently divorced. Before the divorce,
she had been receiving the child tax benefit (the benefit) that
is provided for in subdivision a.1 of division E of Part 1 of the
Income Tax Act (the Act) in respect of their child.
From the time of their separation until February 1996, they
shared joint custody of their child, and the Appellant continued
to receive the benefit, apparently by mutual agreement. In March
2001, she was notified by the Minister of National Revenue that
he had determined that for the previous three years she had not
been entitled to the benefit payments she had received, and that
she would have to repay almost $7,000. These appeals are brought
from those assessments.[1] They were heard under the Court's informal
procedure.
[2] Before going further, I should
comment upon the Reply to the Notice of Appeal filed by the
Deputy Attorney General of Canada in this case. Paragraphs 3 and
4 of that document read:
3. By Notices
dated March 20, 2001, the Minister notified the Appellant for the
1997, 1998 and 1999 taxation years that the amount of [Canada
Child Tax Benefits] to which she was entitled had been
recalculated and requested that overpayments of $2,861.00,
$2,120.13 and $1,948.40 respectively be
repaid
4. In so
notifying the Appellant, the Minister relied on the following
assumptions of fact:
a) the facts
stated and admitted above;
b) the
Appellant is a parent of [the child];
c) in 1997
through 1999 [the child] was a "qualified dependant" as defined
in section 122.6 of the Income Tax Act (the
"Act");
d) [the child]
did not reside with the Appellant in 1997 through 1999;
e) the
Appellant did not primarily fulfill the responsibility for the
care and upbringing of [the child] in 1997 through 1999; and
f) the
Appellant is not an "eligible individual" as defined in
section 122.6 of the Act.
It is obvious that no thought went into the
creation of these two paragraphs. There was no recalculation of
the Appellant's entitlement, as paragraph 3 states. In fact, the
Minister determined that it was not the Appellant but her former
husband who was the eligible individual for the three years in
question, and that she was, therefore, not entitled to any
benefit at all. Paragraph 4 purports to recite the assumptions of
fact upon which the Minister based his redeterminations.
Subparagraph 4(a) states that the content of paragraph 3, that is
the fact of issuing the Notices dated March 20, 2001, was assumed
and relied on in issuing those Notices, which is obviously
impossible. Subparagraphs 4(c), (e) and (f) state conclusions
either of law or of mixed fact and law, including, of course, the
very conclusions of mixed fact and law that the Court must
decide. These comments may seem picayune until it is remembered
that case law has conferred a special status on the assumptions
of the Minister that underlie an assessment under the Act.
I can only repeat what I, and other judges of this Court, have
said on numerous recent occasions. If the Deputy Attorney General
of Canada persists in filing pleadings which purport to assert
assumptions made by the Minister that on their face are specious,
then the Court will have no alternative but to treat all the
pleaded assumptions simply as allegations of fact as to which the
burden of proof is on the Crown.
[3] Section 122.61 of
the Act provides for payment of the benefit to an
"eligible individual". In order to meet the definition of that
expression, which is found in section 122.6, a person must reside
with the child, and must be the parent who "... primarily
fulfils the responsibility for the care and upbringing of the
[child]". Even in
cases of joint custody, only one parent can meet this definition
at any one time. If the child resides with only one of the
parents then only that parent can be the eligible individual and
receive the benefit payments. In cases of joint custody where the
child lives with both parents, entitlement lies with the parent
who is found to have primarily fulfilled the responsibility for
the child's care and upbringing during the relevant period,
taking into consideration all the prescribed factors.
[5] In the present case, there is no
real dispute about the facts that govern entitlement to receive
the benefit. Indeed, the Appellant began her evidence with the
statement:
... I am not really arguing about who was the primary
caregiver for ... our child. What I would like to just argue
about is the money I have to pay back.
(Transcript page 4)
From time to time during her evidence, the Appellant did
assert that she and her former husband shared the child's
upbringing more or less equally; however, that evidence related
only to the years since 1999. I believe that she continued to
accept him as the primary caregiver in respect of the period
between 1997 and 1999.
[6] I do not propose to review in
detail the evidence of the Appellant and her former husband as to
their respective contributions to the care and upbringing of the
child during the period in issue here. Clearly they are both
loving parents, and both have contributed significantly to the
child's needs. In February 1996, by a Consent Order, the
Provincial Court awarded sole custody to the father, and ordered
the Appellant to pay maintenance. Since then, the child has lived
with his father; throughout the years in issue the child visited
with the Appellant one afternoon and evening each week, and on
alternate weekends from Saturday morning until Sunday evening. On
those occasions, and at some other times as well by ad hoc
arrangement, she looked after the child's needs. There was little
conflict between the evidence of the Appellant and that of her
former husband as to the 1997 to 1999 period; taken together, it
certainly establishes that during those years, he was the person
with whom the child resided, and also the person who was the
primary caregiver.
[7] The Appellant's real objection to
the redeterminations in this case is that she says that she and
her former husband agreed at the time of their separation that
she would continue to receive the benefit for their child, and
that she would pass it on to him. Certainly the Appellant feels,
perhaps with some justification, that when her former husband
applied for the benefit, and did so retroactively, he was
violating an arrangement they had made. Her evidence was that she
had in fact turned over to him all the benefit payments that she
had received during the period, except for the amounts that she
paid from it for the child's daycare expenses. Her former husband
did not dispute that there was some kind of arrangement, but he
did dispute that she made all the payments to him that she claims
to have made. The evidence of both parents as to the exact
amounts that she paid to him was very unclear, but that is not a
matter for me to decide.
[8] When the Minister issued the
redetermination notices and demanded repayment from the Appellant
of the benefit payments she had received for three years, he also
paid three years benefits retroactively to her former husband,
duplicating the payments that the Minister now seeks to recover
from the Appellant. It is understandable that she feels
aggrieved, facing as she does the demand to repay almost $7,000,
which is effectively for his benefit. It is difficult not to
sympathize with her; however her plight is the result of entering
into the arrangement that she did with her former husband.
Clearly, there are financial issues between them, but they will
have to be resolved elsewhere. My jurisdiction is only to review
the correctness of the Minister's decision that the Appellant was
not the eligible individual in respect of the child during the
three years from 1997 to 1999. The evidence leaves no room for
doubt that the decision was correct, and so the appeals must be
dismissed.
[9] Before leaving this matter, I wish
to comment upon the manner in which this case came to be before
me. It must have been obvious to the Minister when he received
the father's application for the benefit that there was a
potential, in fact probable, dispute between the two parents,
involving as it did the entitlement to the benefit for a
three-year period during which it had already been paid to the
child's mother. The Appellant was given no opportunity to dispute
her former husband's entitlement, even though the decision in
favour of his application necessarily resulted in assessments
against her for repayment of $7,000. When the matter reached the
Court, the Appellant not only had the burden of proof, but she
found herself, as a practical matter, pitted against her former
husband, who had the advantage that his case was presented by the
Deputy Attorney General of Canada, whose counsel had prepared him
to give evidence, led that evidence, cross-examined the
Appellant, and finally, presented legal argument to support the
father's case. She did all of that very capably, and as a result
it was a very one-sided contest. I have decided the case on
the basis of the evidence as it came out in Court, as of course I
am bound to do. I have no idea how the evidence might have
appeared if it had been the Appellant rather than her former
husband who had the benefit of counsel paid for by the state.
Section 174 of the Act provides a mechanism whereby the
issue could have been put before the Court for decision without
the Minister committing the resources of the government to
assisting one side, to the detriment of the other. Once a
question has been stated under that section, the parties can be
left to present their own cases. This is frequently done when
disputes arise as to the entitlement under section 122.61. In my
view, it is a much fairer way to resolve such disputes between
former spouses.
Signed at Ottawa, Canada, this 29th day of
January, 2003.
J.T.C.C.
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