Lucien Mazerolle v. Her Majesty the Queen (Informal Procedure), [1994] 2 CTC 2162, 94 DTC 1381

Léger D.J.T.C.C.:—This appeal was heard in Edmundston, New Brunswick on January 26, 1994 pursuant to the Court's informal procedure.

This is an appeal from a decision of the Minister of National Revenue (“the Minister") according to which the appellant was a Canadian resident during the 1987 and 1988 taxation years. The Minister made a reassessment pursuant to section 2 of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") as amended and applicable for 1987 and 1988.

The evidence shows that the appellant held U.S. citizenship and worked for Frazer Paper Limited, a company whose plant was located in Madawaska, Maine, U.S.A. He was employed by that company on a full-time basis.

The appellant obtained his U.S. citizenship on April 18, 1969 at the age of 23. He was residing in the United States at that time. He had since transferred his residence from the United States to Canada on several occasions. The evidence shows that he had lived with his wife and two children in a house located at 16 Lavoie Street, in Edmundston, New Brunswick, Canada. That house belonged jointly to the appellant and his wife Johanne. The appellant and his wife decided to separate in 1985 because of marital problems. the spouse and the appellant's children continued to live in the family home, and the appellant decided to settle in Madawaska, Maine, U.S.A. He lived in a trailer during the summer of 1985 and rented an apartment in the fall from a certain Richard Martin in St. David, Maine. That apartment was about 12 to 15 miles from his place of work. It was partly furnished and the appellant paid rent of $175 per month. The evidence shows that the appellant purchased furniture worth $350 in order to complete his furnishings. He stayed at Mr. Martin's apartment from November 1985 until May 1988. From May to September 1988, the appellant lived in a trailer near St-Agatha Lake in the United States. From September 1988 to September 1989, the appellant established his residence at the home of a certain O'Neal Rossignol, who lived on Main Street in Madawaska, Maine, U.S.A. The appellant paid rent of $30 per week for that room.

The following facts are other indicators of residence. The appellant had a bank account at the National Bank branch in Edmundston, New Brunswick. He made deposits to that account every week. His spouse was able to make bank withdrawals in order to support herself. The appellant used that account in order to pay his mortgage, his water and electricity bills as well as his municipal taxes. He visited his children once a month and spent the night with them on a few occasions, but did not sleep in the same room as his wife.

The appellant owned a vehicle, that is a small 1984 Ford “pick-up”, which was registered in New Brunswick. During his testimony, he tried to explain to the Court the reason why he had not changed the registration of that truck once in the state of Maine, but he was unable to do so. He was still in possession of his social insurance card issued in Canada. Although he mentioned that he had telephoned the local office in order to have the card cancelled, he was unable to do so. He also received his mail at 16 Lavoie Street in Edmundston, New Brunswick.

The appellant’s son, who is 26 years old, testified at the hearing. He mentioned that he had access to his grandfather's hunting and fishing camp and that he often invited his father there to hunt and fish with him. They often went there together.

The appellant submitted a copy of the certified electoral roll for 1987. That list was the final list of electors available for the years in question and was filed as exhibit A-6. On that list, only the name of Johanne Mazerolle appeared as the only person residing at 16 Lavoie Street in Edmundston.

In September 1989, Lucien Mazerolle and his wife began living together again. They sold their property on Lavoie Street and purchased another on Volpé Street, still in New Brunswick. The appellant claimed that his wife still refused to move to the United States.

The issue to be decided is whether the appellant was a Canadian resident during the 1987 and 1988 taxation years. The Minister relied on sections 2 and 3 of the Act. He submitted that the ties which the appellant established with the United States during the years in question were of a temporary nature and that the latter did not cut his ties with Canada. He also claimed that those residences in the United States, that is living in a trailer, a summer camp and a room, were residences of a temporary nature. His ordinary residence was in Canada, where he sometimes came to sleep and where he hunted and fished.

The appellant submitted on the other hand that the facts showed he had specifically transferred his residence to the United States and that, because of his way of life, most of his time was spent in residence in the United States during the 1987 and 1988 taxation years.

For those not familiar with the region of Edmundston, New Brunswick and Madawaska, Maine, U.S.A., it would be preferable for me to mention that the two cities are, to all intents and purposes, virtually unified cities. The St. John River is a frontier river separating Canada and the United States at this place. The two cities are linked by an international bridge measuring scarcely 200 feet long. The citizens of both cities frequent both places with very little trouble. A vigorous trade exists between the two places. In other words, residents enjoy the conveniences, facilities and institutions of each city as they wish, as though they lived in One and the same country. It is in this context that I must rule in the present dispute.

The relevant parts of sections 2 and 3 of the Income Tax Act read as follows: 2(1) An income tax shall be paid as hereinafter required upon the taxable income for each taxation year of every person resident in Canada at any time in the year.

(2) The taxable income of a taxpayer for a taxation year is his income for the year plus the additions and minus the deductions permitted by Division C.

3. The income of a taxpayer for a taxation year for the purposes of this Part is his income for the year determined by the following rules:

[Emphasis added.]

Counsel for the parties submitted that the Court should consider Thomson v. M.N.R., [1946] S.C.R. 209, [1946] C.T.C. 51, [1946] 1 D.T.C. 812, and Schujahn v. M.N.R., [1962] C.T.C. 364, 62 D.T.C. 1225 (Ex. Ct.), in order to interpret the provisions of the Act in the instant appeal.

Judge Noël in Schujahn, supra, explains the dispute as follows at page 367ff (D.T.C. 1226-27):

The terms "resident" and “ordinarily resident" have been the subject of a number of decisions in the English courts, in the Exchequer Court and the Supreme Court of Canada. A very able and thorough study of these decisions has been made in a judgment of the learned President of the Exchequer Court, in the case of Thomson v. M.N.R., [1945] C.T.C. 63, 85 D.T.C. 684 (Ex. Ct.), which was confirmed by the Supreme Court of Canada [[1946] S.C.R. 209; [1946] C.T.C. 51, [1946] D.T.C. 812]. In both these decisions, a number of cases dealt with by the English courts and some Canadian decisions were analyzed and it is possible to draw from them a number of conclusions of which some may be applicable to the present instance. There is no definition in the Act of "resident" or “ordinarily resident” and these terms should receive the meaning ascribed to them by common usage.

It is quite a well settled principle in dealing with the question of residence that it is a question of fact and consequently that the facts in each case must be examined closely to see whether they are covered by the very diverse and varying elements of the terms and words “ordinarily resident” or "resident". It is not as in the law of domicile, the place of a person's origin or the place to which he intends to return. The change of domicile depends upon the will of the individual. A change of residence depends on facts external to his will or desires. The length of stay or the time present within the jurisdiction, although an element, is not always conclusive. Personal presence at sometime during the year, either by the husband or by the wife and family, may be essential to establish residence within it. A residence elsewhere may be of no importance as a man may have several residences from a taxation point of view and the mode of life, the length of stay and the reason for being in the jurisdiction might counteract his residence outside the jurisdiction. Even permanency of abode is not essential since a person may be a resident though travelling continuously and in such a case the status may be acquired by a consideration of the connection by reason of birth, marriage or previous long association with one place. Even enforced coerced residence might create residential status.

From this it follows that the terms "resident" and “ordinarily resident" are very hard to define and as put by Rand J., in Thomson supra, at page 224 (C.T.C. 63, D.T.C. 815)

The graduation of degrees of time, object intention, continuity and other relevant circumstances, shows, I think, that in common parlance "residing" is not a term of invariable elements, all of which must be satisfied in each instance. It is quite impossible to give it a precise and inclusive definition. It is highly flexible, and its many shades of meaning vary not only in the contexts of different matters, but also in different aspects of the same matter. In one case it is satisfied by certain elements, in another by others, some common, some new.

The expression “ordinarily resident" carries a restricted signification, and although the first impression seems to be that of preponderance in time, the decisions on the English Act reject that view. It is held to mean residence in the course of the customary mode of life of the person concerned, and it is contrasted with special or occasional or casual residence. The general mode of life is therefore relevant to the question of its application.

And at page 225 (C.T.C. 64, D.T.C. 816) he adds:

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 circumstances but also accompanied by a sense of transitoriness and of return.

It was decided in In re Income Tax Act (Manitoba), [1933] 3 W.W.R. 189, 41 Man. R. 621 (K.B.), that:

To determine whether a person has ceased to be resident of any particular place, the duration of his previous residence, his connections with that community and his interest in it are circumstances to be considered.

The instant appeal must be decided taking into account the facts adduced in evidence and the meaning of the word "resident".

The evidence shows that the appellant and his wife were joint owners of a residence located at 16 Lavoie street in Edmundston. Furthermore, the wife and the family continued living in the family home during the period in issue. The spouses had no written separation agreement. The appellant took care of his family and of his residence during the years in question. He regularly visited his family and sometimes slept in the house. In other words, the doors of the residence were always open to him.

As I mentioned above, the appellant received his mail at his address in New Brunswick and although he told us he had tried to have his social insurance card cancelled, it still exists. He always maintained his bank account in Edmundston and he hunted and fished with his son using a licence issued by the Canadian authorities. He also maintained his vehicle registration in Canada.

The appellant reconciled with his wife the following year, in 1989, and he returned to his home on Lavoie street in Edmundston, New Brunswick.

When I consider all the aforementioned facts and examine the decisions cited, it is clear that the appellant did not cut off his ties with his former residence. By his conduct, he always maintained a link with his residence in Canada, to the point that he was absent with the intention to return to Edmundston. Having regard to the evidence adduced, I conclude that the appellant was a resident of Canada and the United States for the purposes of the Income Tax Act and that he had two residences during the 1987 and 1988 taxation years. The appellant must therefore pay his taxes in Canada.

For these reasons, the appeal is dismissed.

Appeal dismissed.