Eric J Mash v. Minister of National Revenue, [1980] CTC 2443, 80 DTC 1396

John B Goetz:—These are appeals by the appellant against assessments for his 1976 and 1977 taxation years. The appellant is an American citizen and a landed immigrant in Canada. He is a Doctor of Philosophy and when he came to Canada in 1970 he was employed at the University of Calgary as an assistant professor. As indicated by the evidence of Mr Richard V Vandenberg (see decison in Thomas C Saunders v MNR) he obtained a sabbatical leave for a period between July 25, 1976 through to August 1, 1977. Prior to going to the United States, he and his wife leased an apartment from month to month, which they gave up and purchased a home in Portland, Oregon in July 1976. When he returned to Canada in mid-1978, he purchased a home in Silver Springs in the northwest part of Calgary, Alberta, and was elevated to a full professorship at the University of Calgary. It should be noted that the appellant owns a trailer house and beach property on the Oregon Coast and has held same for quite some time. When being questioned with respect to his intention to return to Canada, his answers were somewhat equivocal and have not satisfied me that he did not intend to return to assume his duties as a professor at the University of Calgary, pursuant to the terms and conditions of his obtaining a sabbatical leave whereby 80% of his salary was paid by the University of Calgary.

During the sabatical leave, he maintained his Medi-Care Health Plan in Alberta, he maintained his membership by way of paying dues to the Faculty Association of the University of Calgary and also his membership in the Canadian Psychological Association as well as in the United States Psychological Association. He had bank accounts in both countries and, presumably, his pay cheques from the University of Calgary were deposited to his credit in his Canadian bank account and funds therefrom flowing into his account in the United States. He was also employed in the United States and, as a result, filed income tax returns there.

In filing his income tax return in Canada for 1976, his accountant indicated:

After June 25, 76 Dr E J Mash became a resident of the US. The duties of his employment were performed solely in the US both as a resident and as a US citizen. The income received by him from the Univ of Calg is taxed in the US Sup- para (sic) 115(2)(e)(i) and sentence 115(2)(e)(i)(A) of the ITD (sic) exclude this income ($10,913.49) from income subject to tax in Canada.

The respondent, in his reply to notice of appeal, maintained that in assessing the appellant for his 1976 taxation year, he acted upon the following assumptions of fact, inter alia:

(a) the appellant was throughout 1976 ordinarily resident in Canada;

(b) the appellant was, at all times material, employed by the University of Calgary, an educational institute resident in Canada;

(c) the appellant’s absence from Canada was for limited duration and for a temporary purpose.

B. THE STATUTORY PROVISIONS UPON WHICH THE RESPONDENT RELIES AND THE REASONS WHICH HE INTENDS TO SUBMIT

12. The respondent relies upon, inter alia:

(a) Sections 2, 3, 115 and 250 of the Income Tax Act, RSC 1952, c 148 as amended by s 1 of c 63, SC 1970-71-72; and

(b) the Canada-United States Tax Convention

13. The respondent submits that the appellant was a resident of Canada throughout the 1976 taxation year by the operation of sections 2 and 250 and is hence liable to tax on his income from all sources.

14. The respondent denies that the Canada-United States Tax Convention is of any assistance to the appellant.

The respondent maintained the same allegations in his reply to notice of appeal for the 1977 taxation year.

The conditions of the sabbatical leave as referred to in Saunders (supra) apply with equal force to this appellant. The jurisprudence with respect to the interpretation of the words “ordinarily resident in Canada” cited in the Saunders decisions (supra) applies in this case as well.

All of the appellant’s teaching years since he graduated from college in the United States, were in Canada subsequent to 1970 other than when he was on sabbatical leave. Upon his return, he was elevated to a full professorship at the University of Calgary and reassumed his duties in that role. I am satisfied that he had full intention of returning to assume this role when he took the sabbatical leave in that it was a condition of the leave that he return to Canada or make payment for the salary paid to him in his absence from the University of Calgary, all of which is quite relevant to the application of the criteria set down by Mr Justice Mahoney in Her Majesty the Queen v Kenneth F Reeder, [1975] CTC 256; 75 DTC 5160.

The immediate purchase of a home in Silver Springs, Alberta, upon his return, to my mind, indicates an abiding intention of returning to Canada following his sabbatical leave. The way he filed his income tax return in the United States and the base of remuneration for his teaching there are irrelevant. This makes no difference, in my view, (see Stickel v MNR, [1972] CTC 210; 72 DTC 6178) whether or not he paid tax or was liable for tax in the United States. This again does not assist the appellant. I quote freely from the judgment of Judge K A Flanigan, QC, former Chairman of this Board, in Eastwood v MNR, [1975] CTC 2156; 1975 DTC 126, at 2157 and 127 respectively:

Any one of these facts taken by itself would, in my view, be a neutral fact, but when one looks at the overall set of circumstances, the appellant had not satisfied me that he had no intention of returning to reside in Canada, or that he had successfully shed his Canadian residence. It is quite well-accepted law that it is much easier to acquire a new residence than it is to shed an old one. It is also well established that one can have, in a given year, more than one place of residence. I

cannot accept, from the evidence that I have heard today, that the appellant had discharged the onus under the Act. At best, in accepting what he has said, I am left with an equal balance and, in the result, he has not by preponderance of evidence convinced me that he had in the year 1969 divested himself of his situation of being ordinarly resident in Canada. (Italics mine).

Counsel for the appelant placed great reliance upon correspondence and on statements made on certain Interpretation Bulletins published by officers and servants of the Deputy Minister of National Revenue (Taxation). The Minister is not bound by the statements of his agents or servants. If they are wrong in law with respect to the definition of “ordinarily resident in Canada”, and I find the Bulletin referred to as being wrong in law, they are not binding upon me. See MNR v Inland Industries Ltd, [1972] CTC 27; 72 DTC 6013, at 31 and 6017 respectively:

The difference between the wording of this memorandum and the wording of the acturial certificate is quite substantial and it is somewhat surprising that, notwithstanding such advice, departmental approval was given to the payments on behalf of the Minister. However, it seems clear to me that the Minister cannot be bound by an approval given when the conditions prescribed by the law were not met. (Italics mine).

Further, in Ernest G Stickel v MNR (supra), it was held that an Interpretation Bulletin published by the Minister, which misstated the effect of Article 8(a) of a Tax Convention, did not create an estoppel against the Minister. With respect to estoppel against the Minister see also the following cases: Cam Gard Supply Ltd v MNR, [1973] CTC 111; 73 DTC 5133, affirmed by the Federal Court of Appeal, [1974] CTC 487; 74 DTC 6429; Nathan Cohen v Her Majesty the Queen, [1978] CTC 63; 78 DTC 6099. In the editorial note of the decision in Her Majesty the Queen v Cecil M Langille, [1977] CTC 144; 77 DTC 5086, we read:

Laches cannot be imputed to the Crown; it is a privilege of the King not to be bound by the mistakes, omissions or neglects of his officers or servants.

I find that, for the taxation years involved in these appeals, the appellant was “ordinarily resident in Canada”.

For the above reasons, I dismiss the appeals.

Appeals dismissed.