Gabriela Bronec v. Her Majesty the Queen, [1996] 3 CTC 2637 (Informal Procedure)

Couture J.T.C.C.: — These appeals are against assessments with respect to the Appellant’s 1991-1992 taxation years.

The evidence has disclosed the following facts:

The Appellant is married to Miroslav Bronec and since 1990 and during the taxation years under appeal they were separated by mutual agreement while they continued to live under the same roof. While living under the same roof, the Appellant testified conjugal relations with her husband ceased as of July 1990 and thereafter she had no social contact with him, nor did she prepare meals for him or perform any household tasks for him.

A child was born from their union in 1987 and in 1991 and 1992 she filed an income tax return for the purpose of obtaining the child tax credit provided in subsection 122.2(1) of the Income Tax Act (the Act).

Notices of assessment and reassessment were issued over a number of months, which are not material to these appeals. The assessments under appeal were dated March 2, 1995. By his assessments the Respondent refused her claim for the child tax credit and following the filing of a Notice of Objection these reassessments were confirmed by the Respondent.

The sole reason for the Respondent refusing the Appellant’s claim for the child tax credit was explained in a letter dated September 1, 1995, addressed to the Appellant by the Chief of Appeals of the Ottawa Tax Services Office and confirmed by Denis Dionne, the designated appeal officer of Revenue Canada who dealt with these appeals, in his testimony at the hearing. The Reply to the Notice of Appeal was not explicit as to the reasons why the Respondent had refused the deductions in question.

In the letter the Appellant was informed that she was not entitled to the child tax credit since she was not the supporting person as defined in subparagraph 122.2(2)(b)(i) of the Act because, notwithstanding the fact that she was separated from her husband, she lived under the same roof with him at the end of the year.

The subparagraph reads:

(b) “supporting person” of an eligible child of an individual for a taxation year means

(i) where the individual was married and resided with his spouse at the end of the year, that spouse,

Having regard to the circumstances under which the Appellant lived following her separation in 1990, she explained in her testimony, which was not challenged by the Respondent, I cannot subscribe to his interpretation of subparagraph 122.2(2)(b)(i). In my opinion it does not apply to the Appellant, considering the conditions under which she lived with her husband during the taxation years under appeal.

The issue as to whether an individual who is separated from his or her spouse and lives under the same roof, “resides with that spouse” has already been decided by Judge Rip of this Court in Eliacin v. R. (sub nom. Eliacin v. Canada), [1992] 2 C.T.C. 2635. At page 2636 he summarizes the facts as follows:

The appellant argued that she had rightly deducted the amount as maintenance expenses from her income for the 1990 taxation year. She claimed that she was in fact separated from her husband. No separation agreement had been entered into by the spouses on account of their children. The appellant and her husband decided by mutual consent to separate in September 1990 following the latter’s return from Haiti in July 1990. The appellant’s husband had left Canada for Haiti in September 1989.

In October 1990, the appellant’s husband decided to settle in the Montréal area mainly in order to find employment there. The latter returned to Hull on a number of occasions to undertake repairs to a rental housing unit which the parties owned jointly, as well as to pay expenses relating to the property, expenses which were paid out of their joint bank account. He also stayed in Hull for a few days when he was required to work as a teacher with the Ottawa- Carleton School Board. In addition, he returned there from time to time to visit his children.

During his stays in Hull, the appellant’s husband stayed with her and her children. However, the parties were no longer living in a domestic relationship. They stayed in separate rooms during these visits; he slept in the basement.

At page 2638 Judge Rip concludes:

The word “with”, when used in the phrase 66 the ... spouse ... resided with the taxpayer ... in paragraph 63(3)(d) means two things: first, the spouse must reside customarily in the same building as the appellant, and, second, there must be a domestic relationship between the two spouses and their children.

There is a difference between “residing with someone” [translation] and “residing in Canada” [translation]. In a home for the elderly, for example, the elderly persons reside in the same residence, but they do not reside with each other. The appellant’s husband could reside in the same building as the appellant when he was in Hull, but I doubt that they resided together, that is to say with each other, after the start of November 1990 and at any time within 60 days after the end of the year. The appellant’s husband was not qualified as a ‘supporting person’, and the appellant is entitled to deduct child care expenses in computing her income for 1990.

While the assessment with which Judge Rip was concerned in the Eliacin appeal was issued under the provisions of section 63, the expression “resided with” in paragraph 63(3)(d) with which he dealt in his judgment is the same expression found in subparagraph 122.2(2)(b)(i) on which the Respondent relied to issue his reassessments in these appeals.

I agree with the interpretation of Judge Rip as to the meaning of the expression “resided with” which is equally applicable in these appeals. For these reasons the appeals are allowed with costs on a party-party basis.

Appeal allowed.