Rémi Bouchard v. Minister of National Revenue, [1978] CTC 2071, 78 DTC 1074

Guy Tremblay [TRANSLATION]:—This case was heard in Quebec City on May 5, 1977.

1. Summary

The Board must decide whether the appellant resided in Canada for the whole of the 1973 taxation year, and hence whether he was entitled to use section 118 of the new Act in. general averaging for the 1974 taxation year.

2. Burden of Proof

The burden of establishing that the respondents’ assessment is not justified is on the appellant. This burden of proof derives not from one particular section of the Income Tax Act, but from a number of judicial decisions, including the judgment delivered by the Supreme Court of Canada in fî W S Johnston v MNR, [1948] CTC 195; 3 DTC 1182.

3. The Facts

3.1. The appellant, who became an accredited member of the Quebec College of Physicians and Surgeons in 1966, received a Masters degree in physiology from the Faculty of Medicine at Laval University in 1969.

3.2. In June 1969 he went to Boston in the United States to specialize in neurology.

3.3. He returned to Quebec in 1971 to take his examinations in the specialty studied, namely neurology, in order to meet the standards set by both the Quebec and Canadian professional associations.

3.4. In January 1972 the appellant left Canada to conduct neurological research at the Hôpital de la Salpêtrière in Paris, after being awarded a grant by the Canadian Medical Association.

3.5. The appellant returned to Canada on January 13, 1973.

3.6. The appellant had, between 1969 and 1973 and while living outside Canada, continued to pay his membership fees to the Quebec College of Physicians and Surgeons of Canada, the Royal College of Physicians and Surgeons of Canada and the Association des Médecins de Langue française du Canada (Canadian association of French-speaking physicians). Supporting vouchers were entered as evidence.

3.7. The appellant was accompanied by his wife and child while residing in Boston and Paris.

3.8. In 1972 the appellant had left a 1967 model car in storage, which he retrieved when he returned to Canada in 1973.

3.9. The appellant had also stored with his in-laws, who resided in Quebec, a sizeable number of boxes of personal effects which he subsequently retrieved from them on his return.

3.10. According to the appellant, one of the conditions set by the Canadian Medical Association when it awarded him a grant to study in Paris was that he return to practise medicine in Canada.

3.11. In order to get official recognition for his study in Boston, the appellant had to be a member in good standing of the Quebec and Canadian professional associations.

3.12. According to the appellant, he had from the outset of his two years of study in Boston intended to return to Canada to practise medicine. He had the same intention when he left to study in Paris. A position was even kept open for him at the Hôpital de l’Enfant Jésus in Quebec City.

3.13. While he was in Boston, the appellant returned to Quebec City twelve or so times in his first year and four or five times in his second year.

3.14. During the three years he was away, the appellant always maintained a bank account at one of the branches of the Bank of Montreal in Quebec City. He even applied for a $4,000 loan from this branch to further his studies; this loan was payable on demand. Supporting vouchers issued by the bank for 1972 were entered as evidence.

3.15. Although the appellant was to have returned to Canada before the end of December 1972, he explained that all sorts of uncontrollable circumstances had delayed his and his family’s return until January 13, 1973.

3.16. The respondent had, in 1972, considered the appellant to be a non-resident and had therefore not taxed him on the grants he had received.

3.17. In filing his 1974 tax return, the appellant had applied the general averaging principle set forth in section 118 of the new Act.

3.18. In a notice of reassessment dated July 15, 1975, the respondent denied the tax reduction applied for under the general averaging provision. In the respondent’s view, the appellant had not resided in Canada for all of 1973.

3.19. On October 16, 1975 the appellant filed his notice of objection as provided by the Act. The respondent notified the appellant on April 30, 1976 that he was confirming the notice of reassessment dated July 15, 1975.

3.20. On July 28, 1976, the appellant appealed to this Board.

4. The Acts and Comments

Subsections 2(1) and 118(1) of the new Act are the sections that pertain to the case at bar:

2. (1) An income tax shall be paid as hereinbefore required upon the taxable income for each taxation year of every person resident in Canada at any time in the year.

118. (1) Notwithstanding section 117, where, in the case of an individual who was resident in Canada throughout the year immediately preceding a particular taxation year (which particular taxation year is hereafter in this section referred to as the “year of averaging’’), any excess remains when

In order to determine the appellants’ residence in 1973, it is necessary to know at least where he resided during the previous year. If the taxpayer actually resided in Canada in 1972, then he resided in Canada for all of 1973. The fact that the respondent may have regarded the appellant as a non-resident in 1972 is not in any way binding on the Board.

The courts have frequently handed down decisions to establish an individual’s residence or non-residence: Ford v Hart (1873), LR 9 CP 273; Cooper v Cadwalader, 5 TC 101; Levene v IRC, 13 TC 486; [1928] AC 217; Lysaght v IRC, 13 TC 511; [1928] AC 234; Withers v Wynyard, 21 TC 724; Wemyss v Wemyss Trustees, [1921] SC 30; P W Thomson v MNR, [1946] CTC 51; 2 DTC 812; J W Meldrum v MNR, 2 Tax ABC 63: 50 DTC 232; G E Beament v MNR, [1952] CTC 327; 52 DTC 1183; No 416 v MNR, 17 Tax ABC 94; 57 DTC 230; E L Schujahn v MNR, [1962] CTC 364; 62 DTC 1225; W L Mallon v MNR, 35 Tax ABC 420; 64 DTC 449; H Luks v MNR, 35 Tax ABC 411; 64 DTC 444; D MacDonald v MNR, [1968] Tax ABC 502; 68 DTC 433; S Berbynuk v MNR, [1968] Tax ABC 1114; 68 DTC 790; M Truchon v MNR, [1970] Tax ABC 440: 70 DTC 1277; The Queen v K F Reeder, [1975] CTC 256; 75 DTC 5160; G R Eastwood v MNR, [1975] CTC 2156; 75 DTC 126; L B Erikson v The Queen, [1975] CTC 624; 75 DTC 5429.

This long but by no means exhaustive list of precedents provides us with a number of principles and factors, which are worth recalling.

Principles:

(1) Residence is neither domicile nor citizenship;

(2) A person may even have two places of residence.

Factors:

(1) The taxpayer’s background: his native country, his general lifestyle, his habits;

(2) The links that a person preserves with the country in question, such as: immoveable properties (number and value, manner of use), family home, vacation site, storage of furniture, bank account, membership in a religious group, social club or professional organization;

(3) The presence of the husband or of the family and the husband in a given location in the course of the year in question;

(4) Mere intention to return to the country does not necessarily settle the matter of residence, even though it may be essential in determining domicile:

(5) The motives or reasons offered to explain absence from or presence in a given place during a taxation year;

(6) The fact of travelling as a tourist or always remaining in a given location;

(7) The length of time spent in a given place during the taxation year in question and previous years;

(8) The regularity with which the taxpayer returns to his native country.

Comparing these principles and factors with the facts entered as evidence by the appellant, it is obvious to the Board that, prior to 1973, he had always been a resident of Canada. One need only recall that during these years he belonged to the Quebec College of Physicians and Surgeons, the Royal College of Physicians and Surgeons of Canada and the Association des Médecins de langue française du Canada. When the appellant left Canada for Paris, there was a position already reserved for him at the Hôpital de l'Enfant Jésus. The facts taken as a whole demonstrate that this was a purely temporary sojourn outside Canada, undertaken for the purpose of furthering the appellant’s education. The appellant not only kept his domicile in Canada but also his residence. The Board does not have to rule whether, at the same time, he also resided in another country.

Since the appellant was a resident of Canada during 1972, it follows that he was still a Canadian resident in the early part of January 1973, even though he was in Paris awaiting his plane to Canada. Since the appellant subsequently remained in Canada until the end of the year, he thus resided in Canada for all of 1973. Subsection 118(1) of the new Act must therefore apply to the case at bar.

5. Conclusion

The appeal is allowed.

Appeal allowed.