Joyce E.B. Madigane v. Minister of National Revenue, [1989] 1 CTC 2103, 89 DTC 37

Christie, A.CJ.T.C.:—The appellant is a medical doctor who practices at Tyne Valley, Prince Edward Island. In computing her income for her 1983 and 1985 taxation years she seeks to deduct $4,970 and $5,680, respectively, in relation to dependent children.

The children in respect of whom the deductions are claimed number eight. They live in Zimbabwe and it appears that their only particular relationship to Canada arises out of their connection with the appellant. She was born in Zimbabwe in 1941 and left there for England in 1966. She has been a resident of Canada since August 1974. The material filed with the notice of appeal includes these assertions by the appellant, the substance of which were reiterated at the hearing:

I however wish to reiterate that there are no contradictions relating to the assertions regarding my children. They are my children who are biological nieces and nephews. This was indicated in my first Tax Returns from 1974. We, i.e. the indigenous Zimbabweans, do not have anonymous adoptions as obtained in Canada. We adopt biological relatives. That is the essence and fundamental basis of relationships in Zimbabwe. We operate on an extended family where the oldest member of the family assumes responsibility for the younger members of the family. This responsibility is total and universal, particularly where there is bereavement and there are younger children or where there are family disruptions and disappearances as happened during the wars in the seventies.

There are legal adoptions by white Zimbabweans as obtained in Canada and as far as I know no cross adoptions either, but Foster Parenting and Guardianships. I note that your request was non-specific. Except in the white Zimbabwean western style adoptions, the government is not usually involved or consulted in indigenous adoptions. Families establish these adoptions by mutual consent. Perhaps the equivalent legality to binding settlement is dowry gifting by the adopting grandparents.

The government respects these adoptions and the legality or responsibility conferred has never been disrupted or challenged but rather supported the children enjoying equivalent rights and protection to age 18 years.

My children are biological relatives —nieces and nephews—adopted by me in accordance with national and family imperatives obtaining in Zimbabwe and my responsibilities to them are equivalent to those of natural children or adopted children in Canada and elsewhere.

The children were dependent on the appellant. During the years under review they lived at the homestead of the appellant's mother. The appellant visited the children in 1985 and 1987. In support of her appeal the appellant seeks to rely on a document that she obtained in Zimbabwe. It is dated May 20, 1987 and is on the letterhead of the Office of the Director of Social Welfare, P.O. Box 8078, Causeway, Zimbabwe. It is addressed "To Whom it May Concern" and reads:

I am in possession of information that indicates Joyce B. Madigane of Tyne Valley, Prince Edward Island, Canada, has care and control of the following children for the indicated years.

There follows the names of eight persons, the oldest of whom was born on July 20, 1969 and the youngest on May 27, 1980. For each person the indicated years are 1982 to 1985 inclusive. The document goes on:

I confirm that she is totally responsible for financing the household in which the children reside. In addition she is responsible for all expenses including school fees and the like.

Joyce B. Madigane is the guardian of all children indicated above.

Your cooperation and understanding in assisting her will be appreciated.

It is signed by Dawson Douglas Sanyangore MSW, Director of Social Welfare, Registrar of Welfare Organizations, Commissioner of Oaths.

The quantum of what is sought to be deducted is not challenged by the respondent. The dispute is about whether the deductions sought are permissible at all.

Paragraph 109(1)(d) of the Income Tax Act ("the Act") provides, inter alia, that for the purpose of computing the taxable income of an individual for a taxation year this may be deducted from her income for the year: for each of her children who, during the year, was wholly dependent upon her for support and was under 21 years of age, specified amounts to be calculated as provided in the paragraph. Subsection 252(1) of the Act is an extended definition of “child” that includes in paragraph (d) "an adopted child of the taxpayer". Paragraph 251(6)(c) provides that for the purposes of the Act— other than an exception that is not relevant to this appeal —persons are connected by adoption if one has been adopted, either legally or in fact, as the child of the other. The foregoing are the statutory provisions upon which counsel for the appellant expressly founded his case. The question to be answered, therefore, is: Were the persons in respect of whom the deductions are sought the adopted children of the appellant, either legally or in fact, at the times relevant to this appeal?

In my opinion the concept of legal adoption in contradistinction to adoption in fact connotates that the former takes place in compliance with specific laws pertaining to adoption that are in force where the alleged adoption occurs. There is no suggestion that the children were adopted under the laws of Prince Edward Island or any other province of Canada. In order to establish that they were adopted in accordance with the laws of Zimbabwe the first requisite is to establish to the satisfaction of the Court what that law is. Foreign law is a matter of fact that, as a general rule, must be proved by a person who is qualified as an expert witness: Cross On Evidence, 6th (1985) ed. at 630; Sopinka and Lederman The Law of Evidence in Civil Cases at 311 and Phipson On Evidence, 13th (1982) ed. at 580. Only the appellant testified at the hearing and she was not advanced as an expert witness in any matter relevant to the appeal. Therefore it has not been established that the persons regarding whom she seeks to make deductions were legally adopted by her.

Before dealing with the question whether those persons were adopted in fact I make these observations regarding the document signed by Mr. San- yangore. No useful weight can be attributed to it for the purposes of this appeal because there has been no opportunity to test its veracity by cross- examination in respect of either what is in it by way of factual statements or what might be regarded as conclusions of law. This passage from Cox and Cox v. M.N.R., [1985] 1 C.T.C. 2392 at 2393; 85 D.T.C. 320 at 321 is apt:

. . . this type of evidence cannot be assigned any weight for the reason that the respondent was not afforded the opportunity of testing by cross-examination the expertise of the authors of the opinions or what they said in the documents referred to. Subsection 14(2) of the Tax Court of Canada Act states that, notwithstanding the provisions of the Act under which an appeal is made to the Tax Court, it is not bound by any legal or technical rules of evidence in conducting a hearing for the purposes of that Act. I cannot, however, construe this as an unfettered license to disregard the laws of evidence. Indeed I believe that there is a positive duty on the Court to apply those laws if the nature of the subject matter before it for determination is such that in order for justice to be done they should be applied. This is especially true where cross-examination can be vital. Cross- examination is described by Wigmore in his monumental work on the law of evidence as: "Beyond any doubt the greatest legal engine ever invented for the discovery of truth".

There are a number of reported cases in Canadian jurisprudence that consider de facto adoptions. The relevant facts and the point at issue in Anderson v. M.N.R., [1947] C.T.C. 223; 3 D.T.C. 1030 (Ex.Ct.) are set out in this passage taken from the [D.T.C.] headnote:

The taxpayer was a single person maintaining an establishment of at least two bedrooms where she, as a general rule, slept and had her meals prepared and served. During the years 1935 to 1939 incusive the taxpayer supported in this establishment two children whom she had adopted by informal, verbal arrangement with the children's parents.

The Minister disallowed her claim for deduction of the amount allowed under the Act to a single person maintaining a domestic establishment and supporting therein a person wholly dependent on him and connected by blood relationship, marriage or adoption. The Minister claimed that the children were not connected with the taxpayer by adoption because there was no legal adoption under the provisions of the provincial Adoption Act.

At page 230 (D.T.C. 1033) Mr. Justice Angers said:

Does the word "adoption", inserted in paragraph (f) of subsection 1 of section 2 of the Income War Tax Act by 16-17 George V, chap. 10, [1] and constantly kept in the numerous statutes which followed, apply only to adoptions made in compliance with the requirements of an adoption Act of one of the provinces or does it include a bona fide de facto adoption? This is the question arising for solution.

He held that it included a bona fide de facto adoption. He said at pages 243 (D.T.C. 1039-40) :

If we take the word “adoption” in its popular sense it means the act by which a person adopts as his own the child of another or, in other terms, the acceptance by a person of a child of other parents to be the same as his own child.

This is precisely what the appellant has done with regard to Beverley Price and Helen Price, minor children of Charles Price and Margaret Grace Price, with the latter’s consent and, as the evidence discloses, to their relief and entire satisfaction. Beverley was then seven years old and Helen four.

During the Christmas holidays in 1940 the children, accompanied by the appellant, went to Vancouver to see their parents. Beverley, thinking Vancouver was a more lively and exciting place than Victoria, decided not to return to Victoria but to stay with her parents in Vancouver. So from 1932 to 1940, both inclusive, the appellant had the care and custody of the two children. After the Christmas holidays of 1940, when Beverley made up her mind to stay with her parents in Vancouver, Helen continued to remain with the appellant.

The proof shows that from 1934 to 1940 Beverley and Helen Price were kept, maintained, educated and cared for by the appellant at her own expense. The proof also reveals that during the period when the appellant lived at the home of the children's great-aunt in Vancouver she was not providing for the children entirely, but only partially. From 1934 however, when she moved to Victoria, she alone provided for them.

From 1934 to 1940 she alone looked after the care, custody, support and education of Beverley and Helen Price and the proof discloses that she did it unsparingly. She treated the two children as well as if they had been her own. I believe that is what the law, as originally drawn, contemplated. I do not think that Parliament intended that the adoption ought to be made in compliance with the requirements of the various adoption acts, the main and most important objects whereof concern civil status and civil rights, which do not fall within the field of the Dominion jurisdiction but form part of the domain of the provinces.

The appeal of No. 161 v. M.N.R., 10 Tax A.B.C. 277; 54 D.T.C. 201, came on for hearing before R.S.W. Fordham, Q.C. He said at page 277 (D.T.C. 202):

The facts are simple and were not disputed. Appellant is a widower residing in an Ontario city where he has steady employment as a grain elevator worker. About four and one-half years ago, he engaged a housekeeper. She was a married woman who had two children dependent upon her, the husband having left for parts unknown. His whereabouts are still undiscovered, it appears. Ultimately, the appellant and his housekeeper began living together in a common law relationship. At about the same time he purported to adopt the two children who are now about thirteen and sixteen years of age, respectively. The uncontradicted evidence was that appellant was kind to the children, exercised control over them and was concerned about their welfare. The mother had no financial means of her own, received no fixed or regular amount from the appellant, but looked after the house for him and helped to maintain a home for the children.

In these circumstances, appellant sought an exemption of $2,000.00 when preparing his income tax return for 1952. The respondent disallowed this, however, and ruled that the two children in respect of whom the deduction was claimed under section 25(1)(a)(ii) of The 1948 Income Tax Act did not qualify as such under section 127(7) thereof. The exemption claimed was reduced to $1,000.00. This appeal then ensued.

Appellant rests his appeal on the contention that he has the custody and control of the said children and wholly supports them in his self-contained domestic establishment, wherein he also supports his erstwhile housekeeper.

The relevant part of section 25 provides for a deduction of $2,000 in the case of a taxpayer who, during the year, was

"(ii) a person who had a child wholly dependent upon him for support, if the child was, during the year,

(A) under 21 years of age, or. . ."

Section 127(7) reads as follows:

"(7) In this Act, words referring to a child of a taxpayer include

(a) an illegitimate child of the taxpayer,

(b) a person who is wholly dependent on the taxpayer for support and of whom the taxpayer has, or immediately before such person attained the age of 21 years did have, in law or in fact, the custody and control, and

(c) a daughter-in-law or son-in-law of the taxpayer.

Put briefly, the respondent's refusal to allow the exemption claimed hinges on the fact that the appellant is not the father of the two children and has not legally adopted them.

The learned member of the Tax Appeal Board held that the appellant was entitled to the deduction sought. He concluded his reasons at page 279 (D.T.C. 202-3):

Adoption, strictly speaking, was not known to the law of England. The Adoption Act (Ontario) is derived from an imperial statute known as the "Custody of Children Act, 1891” and was included in R.S.O. 1897, chap. 257. For many years, however, people had been (and still are) adopting children de facto, for various reasons. Such children had no right of succession and were under certain other legal disabilities, but were supported and maintained by those persons who had undertaken this responsibility. The Adoption Act does not provide that children maintained under a de facto adoption must be dealt with under its provisions. If the appellant were advised to apply for an adoption order, I should think he would experience the greatest difficulty in the matter, by reason of his status. In my view, a de facto adoption is properly recognizable and particularly when the circumstances are as herein described.

It appears to me that section 127(7)(b) is quite wide enough in its wording to include the children maintained by the appellant and that the evidence adduced shows the appellant to have met the requirements necessary to come within the section's ambit.

In the result Mr. Fordham concluded that a person who had been adopted de facto by a taxpayer came within paragraph 127(7)(b) which is now paragraph 252(1)(b), i.e. that such a person was, in law or in fact, in the custody and control of the taxpayer. The year under review in that appeal was 1952 and what is now paragraph 251(6)(c) had not been enacted in relation to deductions for children in computing taxable income.

Re Agar: Agar v. McNeilly and McNeilly, [1957] O.R. 359, involved a dispute over the custody of a child between the natural mother and the couple who had been given custody of the child a few days after its birth. Mr. Justice Roach, who delivered the judgment of the Court of Appeal, said at page 360-1:

The infant was born in the Wellesley Hospital in the City of Toronto on December 17th 1954. On December 22nd 1954, the mother and child were discharged from the hospital and taken directly to the Victor Home for women, in this city. The child remained there that night and the mother stayed overnight with a distant relative in the city. On the following day, the mother returned to the Victor Home and signed a consent to the child being adopted, and it was that day delivered by the authorities in charge of the Victor Home into the possession of the respondents who intended to adopt it.

The child was still with the respondents in their home and under their care when a writ of habeas corpus was issued on February 15, 1956. The Court treated these facts as speaking for themselves and Roach, J.A. simply stated this conclusion at page 360: “At the date of the issue of the writ, the child was in de facto custody of the respondents as adopting parents. However, an order of adoption had not then nor has it yet been made."

FE and F. v. D. (1965), 52 W.W.R. 81 (Man. C.A.) involved consideration of subsection 99B(1) (added 1961, c. 6) of the Child Welfare Act, R.S.M. 1954, c.

35. It provides:

99B(1) Notwithstanding any other provision of this Act, but subject as in this section provided, where a child is or has been in the custody of, and has been cared for and maintained by, any person as his own child under a de facto adoption, for a period of not less than five years, a judge of a County Court, on the application of any such person, and after receiving a report from the director and upon payment by the person to the director of the prescribed fee unless he dispenses with the payment thereof, and if, having regard to all circumstances, it is, in his opinion, in the best interests of the child so to do, may make a decree of absolute adoption of the child without requiring the consent of the parent or guardian of the child.

One of the questions before the Court on this appeal was whether there had been a de facto adoption. As I construe it, Schultz, J.A., who delivered reasons on behalf of the majority, regarded the words "in the custody of, and has been cared for and maintained by, any person as his own child” that precede the phrase "de facto adoption” in subsection 99B(1) as standards the existence of which determines whether there has been a de facto adoption. He said at page 95:

Once the trial judge hearing the application is satisfied that proof of the requirements essential to a hearing are met, namely, that the child has been in the custody of, and cared for and maintained by, the applicants as their own child for a period of not less than five years, and there is no evidence of bad faith such as a forcible taking, then there is prima facie evidence of a de facto adoption.

In Racine and Racine v. Woods, [1983] 2 S.C.R. 173, the Supreme Court had before it subsections 103(1) and (2) of the Child Welfare Act, Statutes of Manitoba 1974, c. 30. These subsections appear under the heading DE FACTO ADOPTIONS and are the successor to subsection 99B(1) that was considered in F and F. v. D. They read:

103(1) A person who has or has had in his custody, and is caring for and maintaining or has cared for and maintained a child as his own child for a period of 3 consecutive years may make an application on a prescribed form to a judge of a County Court having jurisdiction in the matter for an order of adoption.

103(2) No consent of the parents or guardian of a child is required in support of an application under subsection (1).

This case also involved a custody dispute between the mother and a married couple who had been given possession of the child who was the subject of the controversy. The child was born on September 4, 1976 and, except for a few months after birth and a brief period in May 1978, the child was with the Racines in their home where she was treated as if she were their own and became an established part of the family. Wilson, J. delivered the judgment of the Court and, as happened in Agar, she treated these facts as speaking for themselves in concluding that there had been a de facto adoption. At page 185 she said:

In giving the court power to dispense with the consent of the parent on a de facto adoption the legislature has recognized an aspect of the human condition—that our own self interest sometimes clouds our perception of what is best for those for whom we are responsible. It takes a very high degree of selflessness and maturity—for most of us probably an unattainable degree—for a parent to acknowledge that it might be better for his or her child to be brought up by someone else. The legislature in its wisdom has protected the child against this human frailty in a case where others have stepped into the breach and provided a happy and secure home for the child for a minimum period of three consecutive years. In effect, these persons have assumed the obligations of the natural parents and taken their place. The natural parents' consent in these circumstances is no longer required.

Regardless of the nationality of an individual or his place of residence during a taxation year the question of whether he has been adopted in fact within the meaning of paragraph 251 (6)(c) of the Act is to be determined in accordance with Canadian legal criteria. In my opinion the authorities cited clearly show that these basic features are common to the de facto adoptive parent-child relationship. They live in close proximity to each other. In each of these cases the facts are that the child and the adoptive parent or parents were residing under the same roof and the child was under the actual control and custody of the parents who were in a position to exercise effective parental care and guidance on a continuing basis. The adoptive parents and child constituted a family unit or part of such a unit that was presided over by the parents. In Makki v. M.N.R., [1978] C.T.C. 2260; 78 D.T.C. 1189 (T.R.B.), the appellant sought to make these deductions in respect of his 1975 income: $301.25 for his nephew Khalique S.A. Hadi and $405.80 for another nephew Hassan Mujtuba Makki. Both were attending school in Karachi. In justifying the deductions the appellant sought, inter alia, to rely on paragraph 252(1 )(b) of the Act that includes in the definition of child: "a person who is wholly dependent on the taxpayer for support and of whom the taxpayer has, or immediately before such person attained the age of 21 years did have, in law or in fact, the custody and control.” This contention was rejected. Chairman Lucien Cardin said at page 2261 (D.T.C.) 1190):

. . . it is clear that the appellant who resides in Canada does not, in law or in fact, have the custody or the control of his nephews.

The appellant argued that he visited the children and sent letters counselling them and that he did have the custody and control of his nephews. In my view, the dictionary and the ordinary meaning and implication of the words custody and control would eliminate the possibility of considering that the appellant in Canada could have the custody and control of his school-aged nephews in Karachi.

There is no evidence before me to establish that the conditions that are described in the preceding paragraph obtain in the case at hand. While I accept the appellant's statement that the children in respect of whom she seeks to make the deductions were nephews and nieces, this does not establish the existence of adoptions in fact within the meaning of paragraph 251(6)(c) of the Act. In order to claim deductions for nephews and nieces it would be necessary for them to have resided in Canada during the taxation years under review and to have met the other requirements prescribed under paragraph 109(1)(e) of the Act.

The appeal is dismissed.

Appeal dismissed.