Houle v. R., [1999] 4 CTC 2439

St-Onge T.C.J. (orally):

THE COURT: Marie-Josée Houle’s appeal was heard on September 14, 1998 in Québec, Quebec, and the issue is whether the amount of the child tax benefit in the case of her son Mathieu for the months of March 96 to June 97 was correctly revised in accordance with s. 122.61(1) of the Act.

In her Notice of Appeal, the appellant alleged the following (paragraphs (a) and (b) of the Notice of Appeal form an integral part of my decision):

[TRANSLATION]

(a) the appellant obtained a judgment awarding her the custody of her son; the son lived under a semi-shared custody arrangement between his father and mother, but the appellant had the child for a much greater number of days than her ex-husband;

(b) additionally, the appellant received the child tax benefit and when she made an application for support she reported the benefit in her income statement as income; this amount was thus calculated and taken into account by the judge in determining the amount of the support payments; her husband claimed the said benefit but it should be noted that had the benefit in fact been his he would have had much larger support payments to make than the amount he was actually ordered to pay. In conclusion, this appeal is valid in fact and in law.

In her Reply to the Notice of Appeal the respondent alleged the following (paragraphs 2 to 7 form an integral part of my decision):

[TRANSLATION]

2. On July 20, 1995 the Minister of National Revenue (“the Minister”) issued a child tax benefit notice to the appellant which, inter alia, set the child tax benefit at $4,322.67 for July 1995 to June 1996.

3. On August 20, 1996 the Minister of National Revenue (“the Minister”) issued a child tax benefit notice to the appellant which, inter alia, set the child tax benefit at $3,290.74 for July 1996 to May 1997.

4. On June 20, 1997 the Minister issued child tax benefit notices to the appellant which set the child tax benefit at $3,731 for July 1995 to June 1996 and $1,663.66 for July 1996 to May 1997.

5. On June 20, 1997, when these child tax benefit notices were issued to the appellant, the Minister issued overpayments of $591.67 for March to June 1996 for the base taxation year 1994, and $1,627.08 for July 1996 to May 1997 for the base taxation year 1995.

6. In preparing the child tax benefit notices of June 20, 1997 the Minister took into account, inter alia, the following facts:

(a) in the 1994 and 1995 taxation years the appellant lived separate and apart from her ex-husband, Alain Bouchard;

(b) as a result of information submitted by the appellant’s ex-husband, Alain Bouchard, it was established that the appellant’s son Mathieu had lived with Alain Bouchard since February 9, 1996;

(c) a court judgment clearly indicated that the father had the custody of his son Mathieu and that Mathieu went to live with his father on February 9, 1996;

(d) the appellant has not shown, contrary to what she alleges, that her son Mathieu lived with her during the period at issue for four days a week; (e) in thus reviewing the information obtained from the appellant’s ex-husband, the Minister adjusted the child tax benefit for her son Mathieu to [TRANSLATION] “nil” from March 1995 to June 1997;

(f) the appellant therefore received an overpayment of $591.07 for March to June 1996 for the base taxation year 1994 and $1,627.08 for July 1996 to May 1997 for the base taxation year 1995.

7. The issue is whether the appellant was an eligible individual in respect of her son Mathieu for March to June 1996 and for July 1996 to June 1997, and consequently whether the child tax benefits were properly revised to “nil” for her son Mathieu for those months.

At the hearing the appellant admitted paragraphs 2 to 4 and 6(a) and (e) and denied all the other paragraphs and subparagraphs of the Reply to the Notice of Appeal.

She lived with Alain Bouchard from 1992 to 1990 and had two children by him: Mathieu, born on October 26, 1983, and Corinne, born on May 3, 1987. She also had a child with another spouse.

She had the custody of Mathieu from 1990 onwards. In 1995 Mathieu asked to live with his father but the father did get custody of Mathieu until later.

The appellant explained that her ex-husband often slept away from home because of his work, that on September 7, 1993 he stopped making the support payments, and that from February to June 1996 she had Mathieu for an average of two days a week and throughout the summer of 1996. She continued receiving the child tax benefits.

In September 1996 she told her son [TRANSLATION] “you want to go and live with your father”, and in October she applied to the court for support in the amount of $200 a month. She filed herein an income statement (Exhibit A-l), which she had submitted with her application, and the judgment obtained from the court (Exhibit A-2).

She maintained that the judge had taken the child tax benefits she had received into account in determining the amount of her support.

She concluded her testimony by saying that her ex-husband had stopped paying support on February 7, 1996 and that she had calculated the days her son Mathieu spent with her in 1996 and they came to a total of 216.

In cross-examination, she maintained that from the time of the judgment of April 8, 1997 Mathieu had gone to live with his father because his father did not want to make the support payments. However, as the father had to work out of town and she did not want her son to be alone, Mathieu contin- ued living with her an average of two days a week from February to December 1996, for a total of 216 days.

She admitted she had liberal access rights, namely on Thursdays and on teacher professional development days and that her ex-husband had never objected to her son visiting her.

The ex-husband even babysat the younger children, Corinne, ten, and François-Olivier, five.

René Houle, a photographer, the appellant’s spouse since 1991, corroborated the appellant’s testimony. He stated that since the judgment Mathieu was with his father about two days a week and spent all of the summer of 1996 with him.

In cross-examination he admitted that the appellant’s calculation was not a sure thing, that Mathieu was frequently with his father and that the judgment had resolved the situation, since Mathieu was to stay with his father.

The respondent called the appellant’s ex-husband, Alain Bouchard. He testified that his son Mathieu came to live with him on February 9, 1996 and that his mother could have him one day a week and one week every two weeks. He never objected when his mother wanted to see him and he even went to babysit the appellant’s younger children.

He concluded that he slept away from home once a month and it was he who took care of everything for his son Mathieu, that is, such things as sporting activities, school clothing, food, medical care, accommodation and so on.

Before 1996 he had to pay support for both children. He tried an arrangement with the appellant: she co-operated at first, but in court she no longer remembered making such an arrangement. The judge decided that he had to make retroactive support payments of $85 a month.

In cross-examination he admitted that he gave courses to people in towns around Trois-Rivières such as Drummondville, Grand-Mère and Cap-de-la-Madeleine but only slept away from home once a month. Ordinarily, he was back from work when his son returned from school and his son could always reach him by telephone. At 12 and 13 years old, he could prepare meals for himself.

In 1996 Alain Bouchard paid nothing for either child and the judge took this into account in his judgment. It was agreed that because he had custody of Mathieu he would no longer have to pay support for the two children.

Counsel for the appellant argued that in February 1996 Mathieu went from one house to the other and lived with his mother for 216 days.

An agreement that he would no longer pay support and that the appellant would receive the child tax benefits and would declare them for tax purposes, was entirely the father’s idea.

Counsel argued that the appellant’s only income was $229 a month from a loan and grant, and that the judge had taken the child tax benefits received by the appellant into account in setting the support payment at $85 a month, otherwise the amount to be paid the appellant by the father would have been higher.

The appellant only had one income, and even if there had been an agreement between the parties the appellant was to continue receiving the child tax benefits.

Counsel for the respondent argued that the father stopped paying support for Mathieu because Mathieu went to live with him. No corroboration existed for the agreement, but who had custody of the children? They each had one child.

The mother had less income than the father, so the judge kept the support payment at $85, but had it take effect retroactively.

It was the father who looked after all his son’s activities and provided for his needs, which is consistent with custody of a child.

This fact was not refuted by the appellant.

The father kept no record of the number of days and did not stop his son going to his mother’s, whereas she kept a very strict record of the number of hours.

As far as the child tax benefits were concerned, it appears from the judgment that the judge took these into account.

The appellant did not have one income only; she also had rental income and grants.

Counsel concluded by pointing out that according to the Act an individual is eligible for the benefit if he has custody of the child and provides him with care. She referred the Court to the following judgments: Marshall [reported, À. v. Marshall, [1996] 2 C.T.C. 92 (Fed. C.A.)], Federal Court of Appeal, A-544-95, and Roméo Bouchard [reported, Bouchard c. R. (1997), [1998] 1 C.T.C. 3071 (T.C.C.], Tax Court of Canada, 94-2984 (IT), at pages 6, 7 and 8. The circled passages at page 2 of Marshall form an integra! part of my decision:

This section of the Act contemplates only one parent being an “eligible individual” for the purpose of allowing the benefits. It makes no provision for prorating between two who claim to be eligible parents. Only Parliament can provide for a prorating of benefits but it has not done so.

The term “eligible individual” is defined in s. 122.6 in part as follows:

In this subdivision,

[122.6] “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 the parent of the qualified dependant who primarily fulfil the responsibility for the care and upbringing of the qualified dependant,

(C) is resident in Canada,

and, for the purposes of this definition,

(h) factors to be considered in determining what constitutes care and upbringing may be set out in regulations made by the Governor in Council on the recommendation of the Minister of National Health and Welfare;

[6302] 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.

The weight of the evidence shows that for the period which this appeal concerns the father had the legal custody of Mathieu and the appellant did not even attempt to refute the fact that it was he who did everything to ensure that Mathieu would be happy and not be deprived of those things that are necessary to a normal life for a child of his age.

In light of the precedents cited by counsel for the respondent, the appeal is dismissed.

Appeal dismissed.