REASONS
FOR JUDGMENT
Smith J.
[1]
Angelic Mageau (the “Appellantʼʼ) appeals under the informal procedure from a notice of determination
dated October 20, 2014 whereby the Minister of National Revenue (the “Minister”) determined that she was not the
eligible individual for purposes of the Canada Child Tax Benefit (“CCTB”) in
respect of her two children (A and C) for the 2012 base year (December 2013 to
June 2014) and 2013 base year (July 2014 to November 2014).
[2]
The Minister also issued a notice of
determination dated March 20, 2015 for the 2013 base year (December 2014 to
March 2015) as well as a further notice of determination dated May 20, 2015,
again for the 2013 base year (April 2015 to June 2015).
[3]
While it is admitted that the Appellant was the
eligible individual in respect of her two children for purposes of the CCTB up
to November 2013, the Minister claims that she was not the eligible individual
for the ensuing twelve month period (December 2013 to November 2014) and that
the father was the eligible individual during that period.
[4]
The Minister has also taken the position that
the Appellant was the eligible individual with respect to one child (C) from
December 2014 to June 2015, that she was a shared-custody parent with respect
to the other child (A) for the period from December 2014 to March 2015 and the
eligible individual for A for the ensuing period ending June 2015.
[5]
In order to establish the notices of
determination, the Minister made the following assumptions:
a.
That
the Appellant and the father are the parents of A, born in 1999 and of C born
in 2002;
b.
That
the Appellant and the father have been living separate and apart since 2005;
c.
That
starting on or about November 19, 2013;
i.
A
and C were living with their father on a full time basis;
ii.
C
attended school in the vicinity of the father’s residence;
iii.
A
took a school bus to attend school from his father’s residence;
iv.
The
residence of A and C, as registered with the schools they attended, was their
father’s residence.
d.
As
of December 2014, the Appellant was living with C, on a full-time basis;
e.
From
December 2014 to February 2015, the Appellant shared custody of A, with the
father, and both were living with A on an equal or near-equal basis;
f.
As
of March 2015, the Appellant was living with A on a full time basis.
[6]
The Appellant claims that she was at all times
the eligible individual in respect of both children and disputes the evidence
put before the Minister by the father that led to the notices of determination.
[7]
The issue in this appeal is therefor whether the
Minister has made a proper assessment as summarized in the following table:
Base year 2012 (July 2013 to June 2014)
|
|
Jul.
|
Aug.
|
Sep.
|
Oct.
|
Nov.
|
Dec.
|
Jan.
|
Feb.
|
Mar.
|
Apr.
|
May.
|
Jun.
|
|
Child A.
|
E
|
E
|
E
|
E
|
E
|
I
|
I
|
I
|
I
|
I
|
I
|
I
|
|
Child C.
|
E
|
E
|
E
|
E
|
E
|
I
|
I
|
I
|
I
|
I
|
I
|
I
|
|
|
Legend: I = Ineligible E = Eligible
|
Base year 2013 (July 2014 to June 2015)
|
|
|
Jul.
|
Aug.
|
Sep.
|
Oct.
|
Nov.
|
Dec.
|
Jan.
|
Feb.
|
Mar.
|
|
I
|
I
|
I
|
I
|
I
|
½
|
½
|
½
|
½
|
|
I
|
I
|
I
|
I
|
I
|
E
|
E
|
E
|
E
|
|
Apr.
|
May.
|
Jun.
|
|
Child A.
|
E
|
E
|
E
|
|
Child C.
|
E
|
E
|
E
|
|
|
Legend: I = Ineligible E = Eligible ½ = Shared
custody
|
[8]
The appeal is allowed but only to the extent
described below.
I. Factual
background
A. Appellant’s
version of the facts
[9]
The Appellant testified at the hearing. She
explained that she has had full custody of A and C since the date of separation
from their father in 2005.
[10]
Prior to the events described herein, she was
residing with her two children and second spouse in Montpellier, located
approximately one hour from Gatineau, Quebec. Her children also attended school
there.
[11]
On November 19, 2013, she went on a two week
holiday with her second spouse, leaving the children in the care and custody of
a girl-friend who lived nearby.
[12]
Upon her return, she realized that the children
were living with their father and attending school in Gatineau. However, since
she had decided to leave her spouse and relocate to Gatineau, she asked the
father to continue to care for the two children while she searched for an
apartment and made arrangements for the relocation.
[13]
Once she had settled into an apartment in
Gatineau, she alleges that the children came to live with her. Since she lived
about 15 minutes from the school, she maintains that she borrowed her
neighbor’s vehicle to drive C to the primary school located near the father’s
residence and bus stop, also located nearby, so A could take the school bus.
[14]
The Appellant produced a number of documents
including receipts for medication, an invoice from A’s high-school listing her
name and address, a receipt for books borrowed from the local library and a
receipt for clothing dated November, 2014.
[15]
The Appellant maintained that she paid for all
the children’s activities, food, clothing medication, school fees and that she
often provided money to their father when he arranged activities for them.
[16]
During cross-examinations, she acknowledged that
there was a dispute with C at the end of January 2014 but she maintains that
her daughter only went to stay with her father for 3 weeks while A stayed with
her.
[17]
She also maintained that C had dance classes
every Friday night and that A was in Cadets and that she drove them to and from
those activities every week.
[18]
In December 2014, the Appellant changed C’s
school and in March 2015, she also changed A’s school. The father did not
object to this
B. Father’s
version of the facts
[19]
The father acknowledges that he filed an
application for the CCTB in June 2014 on the basis that, since November 2013,
he had primary care and custody of the two children.
[20]
He explained that after the Appellant left for
holidays in November 2013, he received a call from C’s school with a complaint
that she was not appropriately attired for the weather. He purchased a winter
jacket for her. He thought this was irresponsible on the part of the Appellant
and was not satisfied with the arrangements made for the care of the children.
He felt compelled to intervene and did so by assuming full care and custody of
A and C and moving them to his residence in Gatineau. As a result of this, he
was required to drive from Gatineau to Montpellier and back every day for
school. This was not sustainable and he contemplated a change of schools.
[21]
Unable to reach the Appellant to discuss the
matter, he decided that the best course of action was to enroll the children in
schools located in Gatineau. He did so providing his residential address for
the school and transport companies. He alleges that the Appellant accepted the
change upon her return from holidays.
[22]
He acknowledges that the two children returned
to live with their mother in January 2014 but explains that there was conflict,
particularly with C, which led to criminal charges being laid against the
Appellant. Both children came back to live with him.
[23]
The charges against the Appellant were withdrawn
in March 2014 and both A and C resumed visits with her. C stayed with the
Appellant during July 2014.
[24]
According to the father, there was more conflict
in late August or early September, and the two children resided mostly with him
from September until December 2014 while seeing the Appellant mostly on
weekends.
[25]
Various documents were filed as evidence
including a letter from the school board and bus transportation company
confirming that the address of record was the father’s. Also produced was a
letter signed by a neighbor as well as other letters from the school with the
children’s reports cards for the period November 2013 to February 2014 and from
September to December 2014. All documents bore the father’s residential address.
[26]
The father acknowledges that C returned to live
with the Appellant in December 2014 and that he shared custody of A with the
Appellant from December 2014 to the end of March 2015. He acknowledges that
effective April 2015, both children returned to live with the Appellant on a
full-time basis.
[27]
In summary, the father maintains that he bought
clothing for the children, paid for some school expenses, purchased bus passes,
made their lunches and helped with their homework. He concedes that the time
spent by the children varied a great deal during the period in question but
maintains that, with few exceptions, he was the primary care giver and that the
children spent about 75% of their time with him from November 2013 to December
2014, diminishing thereafter, as described above.
C. The
Law
[28]
The CCTB regime is set out in section 122.6 of
the Income Tax Act (the “Act”). The critical issue in this appeal
is to determine who, for the purpose of that provision, meets the definition of
“eligible individual”.
[29]
Prior to the disputed period, it is apparent
that the Appellant had the benefit of the presumption set out in paragraph
122.6 eligible individual (f) in that both A and C resided with
her and, as the female parent, she was presumed to be the parent who primarily fulfilled
the responsibility for their care and upbringing.
[30]
However, the presumption noted above is
rebuttable in two important instances i) where both parents meet the definition
of “shared-custody parents” or where ii) another parent has filed an application
claiming to be the primary caregiver (subsection 6301(1)(d) of the Income
Tax Regulations (the “ITR”)).
[31]
Section 122.6 contains a number of key
definitions as follows:
“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 a parent of the qualified
dependant who;
(i) is the parent who primarily fulfils
the responsibility for the care and upbringing of the qualified dependant and
who is not a shared-custody parent in respect of the qualified dependant; or
(ii) is a shared-custody parent in respect
of the qualified dependant;
(c) is resident in Canada or,
where the person is the cohabiting spouse or common-law partner of a person who
is deemed under subsection 250(1) to be resident in Canada throughout the
taxation year that includes that time, was resident in Canada in any preceding
taxation year;
. . .
and for the
purposes of this definition;
(f) where the qualified
dependant resides with the dependant’s female parent, the parent who primarily
fulfils the responsibility for the care and upbringing of the qualified
dependant is presumed to be the female parent;
(g) the presumption referred to
in paragraph 122.6 eligible individual (f) does not apply in prescribed
circumstances, and
(h) prescribed factors shall be considered in determining what constitutes
care and upbringing;
"shared-custody parent"
in respect of a qualified dependent [sic] at a particular time means, where the
presumption referred to in paragraph (f) of the definition "eligible
individual" does not apply in respect of the qualified dependant, an
individual who is one of the two parents of the qualified dependant who;
(a) are not at that time cohabitating spouses or common-law
partners of each other;
(b) reside with the qualified dependant on an equal or
near equal basis; and
(c) primarily fulfil the responsibility for the care and
upbringing of the qualified dependant when residing with the qualified
dependant, as determined in consideration of prescribed factors.
[32]
Where the court is satisfied that two parents
meet the definition of “shared‑custody parents” including the requirement
that the children reside with both “on an equal or near equal basis” and that
both parents “primarily fulfil the responsibility for the care and upbringing”
of the children when they are residing with them, the CCTB will be shared
equally between them, subject to their adjusted income. But when the children
or “qualified dependants” do not reside with both parents “on an equal or near
equal basis”, the Court must look at the prescribed factors set out in section
6302 of the ITR:
6302. Factors
— For the purposes of paragraph (h) of the
definition “eligible individual” in section 122.6 of the Act, the following
factors are to be considered in determining what constitutes care and
upbringing of a qualified dependant:
(a) the supervision of the daily activities and needs of the
qualified dependant;
(b) the maintenance of a secure environment in which the qualified
dependant resides;
(c) the arrangement of, and transportation to, medical care at
regular intervals and as required for the qualified dependant;
(d) the arrangement of, participation in, and transportation to, educational,
recreational, athletic or similar activities in respect of the qualified
dependant;
(e) the attendance to the needs of the qualified dependant when the
qualified dependant is ill or otherwise in need of the attendance of another
person;
(f) the attendance to the hygienic needs of the qualified dependant
on a regular basis;
(g) the provision, generally, of guidance and companionship to the
qualified dependant; and
(h) the existence of a court order in respect of the qualified
dependant that is valid in the jurisdiction in which the qualified dependant
resides.
[33]
Since the Court must determine which parent was
the “qualified individual”, it is clear that this case is based almost entirely
on the credibility of the Appellant and the father. At first blush, both
versions of the facts presented by them seem to be diametrically opposed.
[34]
The issue of credibility was addressed by the
Court in the decision of Daimsis v The Queen, 2014 TCC 118 (at paragraph
24):
[24] It
is trite law that I can accept all of the evidence of a witness, none of
evidence of the witness or I can accept some of the witness’ evidence and
reject other portions of the witness’ evidence. The oft quoted dictum of
Justice O’Halloran of the British Columbia Court of Appeal in Faryna v.
Chorny, [1952] 2 D.L.R. 354 (B.C.C.A.), at pages 356 and 357 also comes to
mind:
If a trial Judge's finding of
credibility is to depend solely on which person he thinks made the better
appearance of sincerity in the witness box, we are left with a purely arbitrary
finding and justice would then depend upon the best actors in the witness box.
On reflection it becomes almost axiomatic that the appearance of telling the
truth is but one of the elements that enter into the credibility of the
evidence of a witness. Opportunities for knowledge, powers of observation, judgment
and memory, ability to describe clearly what he has seen and heard, as well as
other factors, combine to produce what is called credibility, and cf. Raymond
v. Bosanquet (1919), 50 D.L.R. 560 at p. 566, 59 S.C.R. 452 at p. 460, 17
O.W.N. 295. A witness by his manner may create a very unfavourable impression
of his truthfulness upon the trial Judge, and yet the surrounding circumstances
in the case may point decisively to the conclusion that he is actually telling
the truth. I am not referring to the comparatively infrequent cases in which a
witness is caught in a clumsy lie.
The credibility of interested
witnesses, particularly in cases of conflict of evidence, cannot be gauged
solely by the test of whether the personal demeanour of the particular witness
carried conviction of the truth. The test must reasonably subject his story to
an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real
test of the truth of the story of a witness in such a case must be its harmony
with the preponderance of the probabilities which a practical and informed
person would readily recognize as reasonable in that place and in those
conditions. Only thus can a Court satisfactorily appraise the testimony of quick-minded,
experienced and confident witnesses, and of those shrewd persons adept in the
half-lie and of long and successful experience in combining skilful
exaggeration with partial suppression of the truth. Again a witness may testify
what he sincerely believes to be true, but he may be quite honestly mistaken.
For a trial Judge to say “I believe him because I judge him to be telling the
truth'”, is to come to a conclusion on consideration of only half the problem.
In truth it may easily be self-direction of a dangerous kind.
The trial Judge ought to go
further and say that evidence of the witness he believes is in accordance with
the preponderance of probabilities in the case and, if his view is to command
confidence, also state his reasons for that conclusion. The law does not clothe
the trial Judge with a divine insight into the hearts and minds of the
witnesses. And a Court of Appeal must be satisfied
that the trial Judge's finding of credibility is based not on one element only
to the exclusion of others, but is based on all the elements by which it can be
tested in the particular case.
It is through
this jurisprudential lens that I assess the credibility of the two principal
witnesses. In addition, I assess the credibility of the witnesses making use of
human experience, the knowledge of the human condition, the knowledge that
memories fade with time and the fact that human beings are most imperfect
creatures.
[My
emphasis.]
[35]
Despite the apparent contradictions, there are
consistencies in the testimony presented by the Appellant and the father. Notably,
the Appellant does not dispute that she asked the father to continue to care
for A and C upon her return from holidays, as she looked for an apartment. Both
agree that the children returned to live with the Appellant once she had
settled into an apartment in January 2014 but that there was conflict with C
that led her to return to live with her father. The duration of that period is
disputed.
[36]
Also, the Appellant does not dispute that the
children changed schools from Montpellier to Gatineau and that the bus stop for
A and the school for C were located near the father’s residence located
approximately 15 minutes from the Appellant’s apartment in Gatineau.
[37]
The Appellant stated that she drove both children
every morning and arranged to pick them up at the end of the day. She indicated
that she used a neighbour’s vehicle but no evidence was adduced to corroborate
this statement. While I have no difficulty believing that the Appellant did so
on numerous occasions, I find it improbable and unlikely that she did so every
school day during the whole time period in question.
[38]
While it might seem that the father is simply
trying to take advantage of the fact that he took steps to change the
children’s school, providing the Court with the documentation collected during
that process, I find that his position is more nuanced and therefore more
credible. He acknowledges that the time spent by the children with either
parent was by no means consistent but expressed the view that by and large the
children resided about 75% of their time with him. The father also acknowledged
that both children returned for a time to live with the Appellant in January
2014 and that C returned to live with the Appellant for the month of July 2014
and on a full time basis from December 2014.
[39]
The Appellant’s testimony was much less nuanced.
She was defensive and categorical, insisting that the father was lying. While
she maintained that she absorbed most of the child-related expenses, she appeared
to gloss over the events that transpired during the months in question. Although
she admitted in cross-examination that there was some conflict with C that led
to charges being laid against her, she simply glossed over that event. This
suggests that she has been less than truthful and forthright in her version of
the facts and that the Court is not getting the full picture.
[40]
Even if I was tempted to give the Appellant the
benefit of the doubt, the Appellant must still adduce evidence and convince the
Court (looking at the factors set out in regulation 6302 of the ITR) that the
children resided with her and that she primarily fulfilled the responsibility
for their care and upbringing. Merely insisting that she paid for most of the
child-related expenses is not enough.
[41]
Moreover, the Appellant has the onus of refuting
and demolishing the presumptions on which the assessment is based: Hickman
Motors Ltd. v Canada, (1999) 2 S.C.R. 336. I am of the view that she has
failed to do so.
[42]
As indicated by Lamarre-Proulx, J, in Robitaille
v The Queen, [1997] T.C.J. No.6, para 15, (Tax Court of Canada) unless the
Appellant is able to convince the court on a balance of probabilities, the
Court is bound by the decision of The Queen v Marshall, 96 D.T.C. 6292,
to the effect that the Minister’s assumptions must be confirmed:
15 According
to the long-standing rules of evidence in tax litigation, in order to obtain a
reversal of this determination, the burden is on the appellant to show that she
was the one who primarily fulfilled the responsibility for the care of the qualified
dependent children . . . .
[43]
In other words, since the Appellant has not
convinced the Court that she was the parent who primarily fulfilled the
responsibility for the care of the children, the Minister’s notices of
determination, as described above, must stand unless there is another reason to
modify them.
II. Conclusion
[44]
In the end, I find that while the Appellant has incurred
more than her share of the child related expenses and weekend activities, her claim
that the children resided with her on an exclusive basis is simply not
supported by the evidence. Having heard the evidence of both parents, I find
that the “preponderance of probabilities” (Daimsis, supra)
favours the father’s version of the events.
[45]
To conclude, I am not prepared to disturb the
conclusions reached by the Minister save for the following two exceptions based
on the admissions made by the father:
i) The
Appellant and the father were shared-custody parents in respect to A and C
during the month of January 2014; and
ii) The
Appellant was the eligible individual in respect to C for the month of July
2014.
Signed at Toronto,
Ontario, this 2nd day of June 2016.
“Guy Smith”
Email this Content