Turnbull v. The Queen, docket 97-262-IT-I (Informal Procedure)

Date: 19980304

Docket: 97-262-IT-I

BETWEEN:

HARVEY TURNBULL,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Somers, D.J.T.C.C.

[1] This appeal was heard in St. John's, Newfoundland, on January 15, 1998, pursuant to the Informal Procedure of this Court concerning the Appellant's 1994 taxation year.

[2] The issues in this appeal are:

a) whether the Appellant is entitled to a deduction for moving expenses in relation to his trip to British Columbia in 1994;

b) whether the Minister of National Revenue (the "Minister") properly considered social assistance payments made to the Appellant's spouse in reassessing the Appellant's claim for the spousal amount.

[3] The Respondent submits that the Appellant was not entitled to a deduction for moving expenses as allowed by subsections 62(1) and 62(3) of the Income Tax Act (the "Act") in that he did not establish his ordinary residence in British Columbia as a result of having commenced employment in that province.

[4] The Appellant, at this hearing, stated that he is not contesting the Minister's assessment pertaining to the social assistance payments of $4,320 which were properly included in the income of the Appellant's spouse for the 1994 taxation year in accordance with paragraph 56(1)(a) of the Act.

[5] In reassessing the Appellant the Minister made the following assumptions of facts which the Appellant admitted or denied:

"(a) the Appellant went to British Columbia during the 1994 taxation year in search of employment; (denied)

(b) while in British Columbia during the 1994 taxation year, the Appellant worked for employers in North Vancouver, Surrey, Abbotsford and Coquitlam; (admitted)

(c) the Appellant returned to Newfoundland prior to the end of 1994; (admitted)

(d) on his 1994 income tax return, the Appellant indicated that his place of residence of December 31, 1994, was Newfoundland; (admitted)

(e) the Appellant's spouse continued to reside in Newfoundland and her child tax credit payments continued to be directed to a Newfoundland address; (admitted)

(f) the Appellant's third child was born in Newfoundland on December 21, 1994; (admitted as amended)

(g) the Appellant did not provide any documentation in support of his claim that his family accompanied him to British Columbia; (denied)

(h) the Appellant did not move to British Columbia as a result of a change in employment nor did he establish his ordinary residence in British Columbia; (denied)

(i) the Appellant is not entitled to claim moving expenses in relation to his trip to British Columbia; (denied)

(j) the Appellant's spouse received social assistance payments of $4,320 in Newfoundland during 1994; (ignored)

(k) the social assistance payments were considered part of the net income of the Appellant's spouse; for purposes of determining the Appellant's entitlement to the spousal amount. (ignored)"

[6] The Appellant, a lifetime resident of Newfoundland, went to British Columbia during the 1994 taxation year in search of employment. While in British Columbia the Appellant worked for employers in North Vancouver, Surrey, Abbottsford and Coquitlam. The Appellant then returned to Newfoundland prior to the end of 1994. Furthermore the Appellant indicated in his 1994 income tax return that his place of residence on December 31, 1994 was Newfoundland.

[7] The Appellant's spouse resided part of the 1994 taxation year in Newfoundland. Her child tax credit payments continued to be directed to a Newfoundland address. His wife's cheques were deposited throughout 1994 in a Newfoundland bank account. She did not advise the Newfoundland government of her change of address.

[8] In 1993, the Appellant left Newfoundland by driving to Edmonton in search of employment; once employment was obtained, he had his wife and one child move to Edmonton. After a certain period of time, she returned to Newfoundland because she was frightened of living in a big city. The Appellant came back to Newfoundland.

[9] In February 1994, the Appellant went to Vancouver, buying a one-way airfare. His wife and family joined him later. Both brought only the usual travelling luggage on the plane. No furniture was moved to Vancouver; the Appellant thought that the furniture in his home was not worth the expense. Once in Vancouver, he rented an apartment and bought some second hand furniture.

[10] The Appellant did not sell or rent his house in Newfoundland, which was inherited from his father. Since 1994, he demolished his house in Newfoundland and built another one upon receiving a grant from the government for its construction.

[11] The evidence has shown that the Appellant went out West: in 1993 to Edmonton, in 1994 to Vancouver and to Yellowknife in 1997.

[12] The issue to be decided is whether the Appellant is entitled to a deduction for moving expenses in relation to his trip to British Columbia in the 1994 taxation year.

[13] Pursuant to subsections 62(1) and 62(3) of the Act, the taxpayer has a right to deduct his moving expenses incurred while moving from the residence where he ordinarily resided in Canada to a new ordinary residence in Canada.

[14] In the decision in Thomson v. M.N.R. (1946) S.C.R. 224, Justice Rand of the Supreme Court explains "ordinary residence" as such: "residence in the course of the customary mode of life of the person concerned and it is contrasted with special or occasional or casual residence".

[15] In applying this principle of ordinary residence it must be construed in light of the circumstances in each case.

[16] In this appeal, the Appellant went out West in 1993, 1994 and 1997. He came back each year because of his wife's desire to return to Newfoundland. The Appellant did not advise the Newfoundland government of his change of address. His wife continued receiving social assistance cheques from the government and depositing them in her bank account. The Appellant did not sell or rent his house in Newfoundland. It appears that he intends to live permanently in Newfoundland, as he calls Newfoundland "home". He rebuilt his house on the property inherited from his father.

[17] In view of the circumstances, the Appellant has failed to establish his ordinary residence in British Columbia in the 1994 taxation year. He is therefore not entitled to a deduction for moving expenses pursuant to subsections 62(1) and 62(3) of the Act.

[18] The appeal is dismissed.

Signed at Ottawa, Canada, this 4th day of March 1998.

"J.F. Somers"

D.J.T.C.C.