Citation: 2011 TCC 556
Date: 20111206
Docket: 2010-3844(IT)I
BETWEEN:
DAWN DESJARDINS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Hogan J.
I. INTRODUCTION
[1]
This is an appeal from
the confirmation of the notices of determination issued by the Minister of
National Revenue (the “Minister”) in respect of the Canada Child Tax Benefit
(“CCTB”) and the Goods and Services Tax Credit (“GSTC”) for the base taxation
years 2005, 2006 and 2007.
II. BACKGROUND FACTS
[2]
Dawn Desjardins (the
“Appellant”) and Alain Simonot separated in the early fall of 2004. They
have three children. At the time of the separation, the eldest child was
entering full-time schooling (grade 1), the middle child was entering part‑time
kindergarten, and the youngest child was not yet in school. The youngest began
full-time schooling in September 2007.
[3]
The Canada Revenue
Agency (the “CRA”) originally determined that the Appellant was eligible to
receive the CCTB and GSTC for the base taxation years 2005, 2006 and 2007 in
respect of her three children and, from July 2006 to October 2008, she did
receive them.
[4]
In October 2008, Mr. Simonot
applied to receive the CCTB and the GSTC for the base taxation years 2005,
2006, and 2007. His application stated that from December 1, 2004 the
children lived primarily with him and that Dawn Desjardins had them in her care
an average of five nights a month. The CRA accepted the application.
[5]
The following table
sets out the amounts the CRA determined to have been overpaid to the Appellant
in respect of each of the years in question.
|
Year
|
CCTB
|
GSTC
|
|
2005
|
$8,987.00
|
$476.00
|
|
2006
|
$9,189.00
|
$581.04
|
|
2007
|
$1,173.93
|
$124.00
|
[6]
It should be noted that
for the base taxation year 2007, it was initially determined that the Appellant
was entitled to receive a CCTB of $4,715.98 and a GSTC of $668.12. However, the
Appellant was only paid $1,173.93 and $124.00 of those amounts before payments
were stopped or reduced in October 2008.
III. ISSUE
[7]
The issue in this case
is whether the Appellant is entitled to receive the CCTB and the GSTC for the
2005, 2006 and 2007 base taxation years. This question turns on which of the
two parents the children resided with during the years 2005 through 2007 and
which parent primarily fulfilled the responsibility for the care and upbringing
of the children during that period. In order for a parent to be eligible for
the CCTB, the child must reside with that parent and that parent must be the
one, primarily responsible for the care and upbringing of the child. Eligibility
for the GSTC in respect a child is conditional on the child residing with the
parent.
IV. THE PARTIES’ POSITIONS
Appellant’s Position
[8]
The Appellant’s
position is that for 2005 and 2006 she was the person primarily responsible for
the care of the children and that they lived with her for the majority of the
time. After the appellant began full-time employment partway through 2007, care
of the children was split between the two parents on a roughly fifty-fifty
basis.
Respondent’s Position
[9]
The Respondent’s
position is that Mr. Simonot is rightfully entitled to the GSTC and CCTB
for the entire period because throughout that period the children lived with
him roughly 80 percent of the time.
V. ANALYSIS
[10]
The Appellant testified
on her own behalf. Her position is that in 2005 and 2006 the children resided
with her. For part of 2007, residence was split between the two parents on a
roughly fifty-fifty basis. This appears to be consistent with the CRA’s
original determination of eligibility for CCTB and GSTC payments.
[11]
The Appellant explained
that, when she separated from Mr. Simonot in August or September of 2004,
the children came to live with her. She testified that in 2005 she was working
part-time at a night club and taking university courses by correspondence. Two
of the three children were not in school full-time, and they would spend their
days with the Appellant. The Appellant testified that in 2005 the children would
spend weekdays at her residence, and from Friday to Sunday they would be with
Mr. Simonot.
[12]
She testified that this
pattern continued in 2006, except that partway through the year she took on
extra evening shifts during the week. On those nights, the children would sleep
at Mr. Simonot’s residence. However, she maintained that the children
would have stayed with her the majority of the time in 2006. She changed her type
of employment when the youngest child entered kindergarten in September 2006,
but it was still part-time employment.
[13]
When the youngest child
began full-time schooling in September 2007, the Appellant took on full-time
employment with a local outreach organization. The Appellant alleges that it
was from then on that the children split their residence between the two
parents roughly equally. The full-time position required her being on call on
alternate weekends, but when this was necessary she would be given time off
during the week to compensate. The Appellant testified that when the children
slept at Mr. Simonot’s during the week because of her being on call, they
would be dropped off at her place the next morning for school.
[14]
The Appellant explained
that in all three years she was involved in the school life of the children,
attending parent-teacher meetings, for example. She also presented a letter
from Ms. Kaley Thompson, the teacher of two of the children during the
period in question. The letter states that the Appellant attended parent‑teacher
meetings, involved herself in other school activities and communicated with the
teacher about the children’s education. The Appellant alleges that Mr. Simonot
very rarely attended parent-teacher meetings.
[15]
The Appellant presented
letters from an employer, a landlord, a former co‑worker and a friend
that generally supported her position.
[16]
The Appellant presented
insurance documents relating to costs for eyeglasses for the children. The
documents suggest that the Appellant was reimbursed for such expenses incurred
in November 2007. She stated that Mr. Simonot had paid the upfront
cost of the eyeglasses and that she had repaid him upon reimbursment by the
insurance company. The Appellant also entered a receipt dated
September 5, 2007 for a $150 bus pass payment for the eldest
daughter, as well as copies of eight receipts for monthly payments for the
youngest child’s preschool. The preschool receipts are dated from
September 2005 to April 2006.
[17]
I found the Appellant
to be a credible witness.
[18]
Mr. Simonot
testified that from December 2004 the children resided mostly at his
residence. When asked to provide a percentage breakdown he replied that “[o]n a
best case scenario” the children were with him 80 percent of the time, and
frequently spent even more time with him than that. This was reflected in
Mr. Simonot’s October 2008 application for the CCTB and GSTC, in
which he stated that the Appellant only had care of the children an average of
five nights per month.
[19]
For much of the time
period in question, Mr. Simonot was self‑employed as a part owner of a Great
Canadian Dollar Store franchise. He stated that he would often bring the
children to his store after school so that he could complete any tasks that
were required of him there. Owning his own business made it easier to work his
schedule around the children’s requirements, such as picking them up from
school. This explained why the children spent so much time in his care as opposed
to the Appellant. Mr. Simonot did not convince me that such was in fact the
case. If anything, the start-up of the new business and the financial
difficulties that he had to contend with more likely than not left him with less
time for the children than his spouse had, who was then working part-time.
[20]
The Crown introduced a
photocopy of a school workbook belonging to the middle child. The workbook is a
calendar for the 2007-2008 school year. Parents were expected to initial it for
each day. The Crown had Mr. Simonot examine a few sample pages from the
workbook; he confirmed that the majority of the initials on the pages presented
were his own. The probative weight of this document is questionable, as it does
not include weekends and in any event only covers one four‑month period (September 2007
through December 2007) out of the entire three years at issue. The
Appellant testified that during this four-month period the care and residence
of the children was split between the two parents roughly evenly.
[21]
The Crown entered into
evidence letters that generally supported Mr. Simonot’s position, one from
a couple who are his neighbours and one from a former employee. The Crown also
introduced an interim consent order dated September 2, 2008 reflecting an
agreement entered into by the two parents. Paragraph 5 of the order
states that Mr. Simonot is to have the children on weekdays and on the second
weekend of every month. Mr. Simonot stated that these terms reflected the
status quo from the years at issue in the present appeal. However, it should be
noted that the order was entered into around the time the Appellant moved away
from Camrose, in September 2008. It seems just as likely that the order
was entered into to avoid disruption in the children’s lives on account of
their mother’s move.
[22]
Mr. Simonot’s
testimony revealed several contradictions. When initially questioned on the
subject, Mr. Simonot claimed that when the Appellant moved to within a few
houses from his, the children did not spend a significant amount of time with
the Appellant. When cross-examined by the Appellant, Mr. Simonot
contradicted this testimony by agreeing that, when the two youngest children
were not yet in school full‑time, they spent their days at the
Appellant’s residence. The youngest child did not begin full-time schooling
until September 2007.
[23]
The Appellant entered
into evidence a letter drafted by Mr. Simonot dated August 16, 2007
and sent to the CRA. The letter states that he and his ex-wife had joint custody
of Leah Simonot (the middle child) and that she resided with both of them.
[24]
When I showed Mr. Simonot
this letter and questioned him on it, he indicated that joint custody merely
referred to shared parental decision-making authority regarding the child.
However, the letter clearly states that the child resides with both
parents, a point which was not addressed by Mr. Simonot. In fact, during
his examination in chief, Mr. Simonot contradicted the statement made in
the letter by stating that the children rarely stayed with their mother.
[25]
Finally, Mr. Simonot
stated that the appellant lived on the same street as he for “a brief period of
time”. Questioned on this point, Mr. Simonot stated it lasted from
December 2004 until roughly a year before the Appellant moved away from
Camrose. This represents a period from December 2004 to roughly
September 2007, or approximately two years and nine months. In fact, from
the letter the Appellant introduced from a housing manager for The Bethany
Group, it appears this period lasted until January 2007, or just over two
years. Even so, given that the period under review is three years, it seems
surprising that two years could be viewed as “a brief period”. The answer
suggests to me that Mr. Simonot was deliberately being evasive, trying to colour
the evidence in his favour.
[26]
This case boils down to
a question of credibility. The parents’ stories are mutually exclusive. The Court
must decide which of the two parents is more credible. The evasiveness on the
part of Mr. Simonot and the inconsistencies in his evidence tend to weaken
the credibility of his version of the facts. Therefore, on a balance of
probabilities, it appears to me that the Appellant’s version is correct: the
children resided with her for the majority of the time throughout 2005 and
2006, and then, when she began full-time employment in mid‑2007, the
parents split the housing and care obligations on a roughly equal basis.
V. CONCLUSION
[27]
In light of these
conclusions, the appeal will be allowed and the determinations will be referred
back to the Minister for reconsideration and redetermination on the basis that
the Appellant is entitled to the CCTB for the period from July 2006 to February
2008 in respect of her three children and to the GSTC for the same period.
Signed at Ottawa, Canada, this 6th
day of December 2011.
“Robert J. Hogan”
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