Citation: 2010 TCC 639
Date: 20101215
Docket: 2010-1708(IT)I
BETWEEN:
JULIA PANTELIDIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Pizzitelli J.
[1]
The
only issue to be decided in this appeal is whether the Appellant is the
eligible individual entitled to receive the Canada Child Tax Benefit (“CCTB”)
and Goods and Services Tax Credit (“GSTC”) for the period from January 1, 2010
to June 30, 2010 (the “Period”) in respect of her two daughters. More
specifically, whether the Appellant is the parent who primarily fulfills the
responsibility for the care and upbringing of the children during the Period.
[2]
By
Notices dated January 20, 2010 and January 5, 2010 respectively, as confirmed
on April 8, 2010, the Minister of National Revenue (the “Minister”) notified
the Appellant that her entitlement to the above CCTB and GSTC benefits had been
redetermined so that the Appellant’s former spouse was the eligible individual
entitled to receive the CCTB and GSTC benefits for the Period while the
Appellant would be the eligible individual entitled to receive the benefits for
the period from July 1 to December 31 of this year, and that she and her former
spouse would continue to share eligibility on a six-month alternating basis;
all on the basis that both the Appellant and her former spouse are both equally
responsible for the children’s care and upbringing and hence are in effect
entitled to share the benefits equally in accordance with the Minister’s policy
of shared allocation of benefits.
[3]
By
way of background, the Appellant and her former spouse, E.C., have two daughters, Ga. now 11 and Ge. now 7,
who are indisputably qualified dependants for both the CCTB and GSTC under the Income
Tax Act (the “Act”). The Appellant and her former spouse separated
in 2005. Since such separation, the Appellant received both benefits. On
October 5, 2009, E.C. applied for the benefits in respect of the 2008 base
taxation year and of course was granted the benefits for the period January 1, 2010
to June 30, 2010 as stated above.
[4]
By
Consent Order of the Provincial Court of British Columbia dated September 16, 2008,
in paragraph 1 both parents were granted joint custody of their two daughters.
The two other important paragraphs to note are paragraphs 2 and 3 of the Order
which read as follows:
2. the Applicant,
Julia Pantelidis shall have the primary residence of the Children;
3. The Respondent,
E.C. shall have access to the Children on week one from Sunday at 8:30 a.m. to
Wednesday at 7:00 p.m. and on week two from Saturday at 8:30 a.m. to Wednesday
at 7:00 p.m. with week two to commence September 20, 2008.
[5]
It
is evident that pursuant to such Order, both parents have been given shared and
equal custody of their two children who are to spend an equal amount of time
with each parent.
[6]
A
second Consent Order of the Provincial Court of British Columbia was issued May
26, 2010, wherein paragraph 8 effectively provides that the parents are to share
the CCTC benefit in the same manner as determined by the Minister, which reads
as follows:
8. The father
shall receive the Child Tax Benefit for January through June, and the mother
shall receive said benefit from July through December, for both Children.
[7]
The
Appellant advised the Court she never signed and did not agree with the above
second Order which is specifically stated to be on consent.
[8]
The
position of the Appellant is that she should be entitled to the benefits during
the Period and full-time afterwards for that matter for two reasons: Firstly,
that she is not employed and relies upon the benefits to support her children,
and secondly, that notwithstanding the joint custody order and the fact the
children live with both parents an equal amount of time as per that order,
which she does not dispute, it is she that in effect provides much more of her
time towards raising the children and attending to their needs than her former
spouse, and accordingly, she is the parent who primarily fulfills the
responsibility for the care and upbringing of her children and hence is the
only eligible individual entitled to the benefits.
[9]
The
position of the Respondent is that the determination should not be changed as
both parents equally fulfil the responsibility for the care and upbringing of
their children during the equal times they have custody, and accordingly, since
the Act does not specifically provide for how to allocate months during
the Period in that case, the policy of the Minister in allowing both parents to
equally share the benefits is justified and should not be disturbed. The relevant
assumptions of the Respondent are found in paragraph 13 of the Reply to the
Notice of Appeal which by paragraph c) thereof references the September 16, 2008
Court Order and includes the following other relevant assumptions:
e) the Children
reside an equal amount of time with each parent at their respective residences;
f) the Appellant
and E.C. equally provide for the care and upbringing of the Children when the
Children are residing with each of them;
[10]
Before
proceeding to analyse the position of the parties in the context of the
evidence before this Court, I would like to summarize the law applicable to the
issues in this appeal.
[11]
Entitlement
to the CCTB and GSTC benefits are set out in sections 122.6 and 122.5
respectively of the Act.
[12]
For
the purposes of the GSTC benefit, subsection 122.5(6) effectively provides that
failing agreement between individuals who have the same qualified dependants as
to entitlement to the benefit, the individual who is the eligible individual
entitled to receive the CCTB under section 122.6 is the individual who will
receive the GSTC.
[13]
For
the purposes of the CCTB, section 122.6 provides that an eligible individual is
the person who:
(a) resides with the qualified dependant; and
(b) is the parent of the qualified
dependant who primarily fulfils the responsibility for the care and upbringing
of the qualified dependant.
There are also other requirements
in that section which are not applicable here.
[14]
As I
mentioned, there is no dispute that the two children are qualified dependants
and that they are to reside with both parents for equal periods in accordance
with the September 16, 2008 Consent Order of the Provincial Court of British
Columbia. I note at this time that the Respondent pointed out that paragraph 2
found in the Order of the Provincial Court of British Columbia which states the
Appellant’s address is the “primary residence” should not be taken to mean that
her address is the only residence of the children. In Carnochan v. R.,
2006 TCC 13, 2006 DTC 2225, Sheridan J. addressed the identical paragraph found
in a custody order and left no doubt that paragraph (a) of the
definition of “eligible individual” in section 122.6 of the Act only
required that the eligible individual “resides” with the qualified dependant
and does not require such residence to be a “primary residence”. In that case,
Sheridan J. found that whether the Appellant resides with her children is a
question of fact and found that in a situation where the children spent
approximately half their time at each of their parent’s house in joint
parenting circumstances, that would satisfy the requirement of residing with
the parent, in effect the same situation we have here. In any event, as I said
earlier, the Appellant concedes that the children resides with her former spouse
an equal amount of time in accordance with the Court Order. I agree, however,
with the Respondent’s position that the use of the words “primary residence” in
the Order does not mean the Appellant’s former spouse does not reside with the
children. Obviously, both parents meet the requirement of residing with the
qualified dependants under paragraph (a) of the definition of “eligible
individual” in section 122.6 of the Act during the Period.
[15]
In
determining whether the Appellant met the requirement of the definition of
“eligible individual” in paragraph 122.6(b) above, it must be noted that
while paragraph 122.6(f) of the Act in the definition creates a
presumption that the female parent is the eligible individual where the
qualified dependant lives with the female parent, it is clear that pursuant to
paragraph 122.6(g) of the Act in the definition that such
presumption does not apply in prescribed circumstances. Paragraph (d) of
Regulation 6301(1) makes it clear that the presumption in favour of the female
parent does not apply where:
(d) more than one notice is filed
with the Minister under subsection 122.62(1) of the Act in respect of
the same qualified dependant who resides with each of the persons filing the
notices if such persons live at different locations.
[16]
Clearly,
the Appellant’s former spouse made application for the benefits under that
subsection as did the Appellant and they both live in different locations, so
it is clear they fall within the exception of paragraph 6302(d) above,
and accordingly, a presumption in favour of the Appellant as the female parent
does not exist in this case. There is no need for the Respondent to rebut the
presumption because the effect of the exclusionary language in such paragraph
122.6(g) and Regulation 6301(1)(d) means the presumption does not
exist in this situation as also clarified in Pollak v. R., [1999] 2
C.T.C. 2225 by Bowman J. as he was at the time.
[17]
In
determining then which parent primarily fulfilled the responsibility for the
care and upbringing of the two children during the Period pursuant to the
aforesaid paragraph 122.6(b) of the Act, the Court must consider
the evidence in light of the factors set out in Regulation 6302 which reads as
follows:
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.
[18]
On
the whole, I find that the evidence supports the Minister’s position that both
parents have demonstrated they are actively and equally involved with the care
and upbringing of their children. Both children live in homes provided by each
of the parents and there is no evidence such homes are not suitable for any of
the children or that they are not secure environments. The evidence shows that
both parents provide for food and clothing for the children when in their
respective homes or as the need arises while in their respective homes and
there is no evidence that the hygienic needs of the children are not provided
by both parents. In fact, the evidence shows that both attend to their hair-cutting
needs notwithstanding that there may be a dispute between them as to who and
how their hair should be cut.
[19]
The
evidence is also clear that the Appellant plays a greater role in the
arrangement of any transportation to medical care at regular intervals.
The evidence is that the Appellant made most of the doctor’s appointments
and picked the children up from school even during days when in the father’s
custody to attend medical appointments, both with their doctor, dentist, eye
doctor and with respect to the eldest daughter, behavioural counsellors while
with respect to the youngest daughter, psychiatric and other counselling
pertaining to certain suspected disorders. While the father testified he too
had taken the children to clinics if they fell ill while under his custody, he
worked during the day when the Appellant made most of the appointments and the
Appellant did not give him sufficient notice of the appointments in effect
making it difficult for him to take them, suggesting the Appellant was
intentionally keeping him in the dark or preventing him from participating; with
him often-times only finding out an appointment was made from his children
telling him the night before that their mother was picking them up from school
the next day to take them to one. There is no doubt there is great
acrimony between the two parents here and that it would be difficult to
transport children to doctor’s appointments on short notice while in
employment, but frankly, this does not detract from the fact the Appellant is
the one who took the initiative in actually making the appointments and went to
great pains to take buses to them before she acquired a car in March of this
year, while the evidence showed he already owned a car. He seems content to
have allowed the Appellant to take this greater role notwithstanding his
complaints. In all fairness, however, it should be mentioned that there is
strong disagreement between the parents as to whether their youngest daughter
has Attention Deficit Hyperactivity Disorder (“ADHD”), with the school report
suggesting she is normal while a psychiatrist report suggests the disorder, while
the ADHD Clinic report of September 10, 2010 states it is still impossible to
diagnose at this point but diagnosed a Post-Traumatic stress disorder as a
reaction to the parents being in constant conflict, all of which the Provincial
Court of British Columbia must still consider in follow up. I mention this
because it was the Appellant’s suggestion that the father refused to
participate in the examinations and meetings dealing with the psychiatrist in
particular, suggesting he did not care or left the burden of dealing with the
issue entirely to her, although his evidence is that he received the psychiatric
report only in the mail and was not asked to participate in advance and that
when he followed up with the psychiatrist he was convinced he needed another opinion
since neither he nor the school thought the daughter had any issues. As I said,
the matter is still under consideration and is being dealt with by both
parents, each in accordance with their personal views which differ. This cannot
be taken to mean that the father is uncaring or unwilling to be involved and in
fact he appears actively involved and concerned with the issue with a differing
view.
[20]
On
the other hand, it is clear the father lived on the same street where the
children attended a French-speaking school with the Appellant’s approval, and
as a person who speaks French, while the Appellant does not, he was the parent
who predominantly helped the children with their homework, registered the
children in the school annually, paid for their school supplies, attended all
field trips, attended parent-teacher meetings, although the Appellant’s
evidence was that she had attended on occasion, was involved in parent-teacher
associations and was recognized for his participation by the group. The
Appellant lived quite a distance from the school and while the children were
with her, the children took long bus rides to attend the school although the
Appellant made sure they got to the bus pick-up location. In this regard, the
evidence is overwhelming that the father plays the predominant role in
supervising and attending to the educational requirements of the children,
with, as I alluded to, the Appellant’s tacit approval.
[21]
In
respect to the children’s recreational activities, it is clear both parents
actively supported and contributed to arranging and taking the children to
various activities. The Appellant applied for and obtained subsidized credits
from the Burnaby City Recreation Department allowing her and her children to
utilize recreational facilities and the children to attend swim lessons. The
father, however, took the children to swim lessons as they fell on Sunday, a
day when the children resided with him or if there were no lessons scheduled,
to Church with him. On the other hand, the Appellant took her eldest daughter
to Tae Kwon Do lessons each Wednesday and Friday as they fell at
times while such daughter is in the Appellant’s custody while the father paid
for the lessons. The father as well takes the youngest daughter to karate
lessons on the Saturdays while she is in his custody while the Appellant takes
her on Saturdays falling within her time of custody. The father pays for the
lessons and uniforms. In my view, both parents equally share in providing and
taking their children to sports and recreational activities.
[22]
The
existence of a Court Order in respect of qualified dependant that is valid in
the jurisdiction in which the qualified dependant resides is also a factor to
consider. Clearly, the Court Orders above alluded to provide for equal custody
arrangements on which as I said there is no dispute. The second Court Order
issued pursuant to a hearing held May 26, 2010, issued on its face on consent,
clearly sets out that the Appellant and her former spouse are to share the CCTB in
the same manner as set out in the determination made by the Minister. The
Appellant states that her signature is not on the Order and she did not consent
to it. The evidence is that the Appellant was represented at the hearing by
counsel and the presiding judge asked whether she was in agreement and she
signified she was. I have some difficulty with the Appellant’s position that
she did not consent to this Order notwithstanding that it lacks her signature.
Frankly, the father’s signature is not on it either but the Court does not need
the Order to be signed as consented to if it is of the view the parties did
indeed consent to it during hearing. In any event, I believe the Order was
issued and consented to by the Appellant and hence should be given weight as a
factor in determining who the eligible individual was for the Period, however,
I might add that I would have come to the same conclusion on this matter even
in the absence of a Court Order containing that clause.
[23]
In
the case at hand, I find that neither parent can be said to be the parent
primarily responsible for the care and upbringing of the children during the
Period as both parents are equally responsible for their care and upbringing.
Unfortunately, as the Federal Court of Appeal confirmed in R. v. Marshall,
96 DTC 6292 (F.C.A.) section 122.6 of the Act:
2. … 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.”
[24]
Furthermore,
as confirmed in Matte v. R, 2003 FCA 19, 2003 DTC 5075, by the Federal
Court of Appeal, the scheme of the section provides that the determination of
who is an eligible individual must be made on no less than a monthly period,
having regard to the formula for calculating the amount of benefits found in section
122.61 which effectively requires that a parent reside with the qualified
dependant on the first day of the month.. In paragraph 9 of this case, Strayer
J.A. stated:
9 We understand this to mean
that the minimum benefit period is one month and that a month of benefits is to
be paid to whomever was the eligible individual at the beginning of the month:
…
[25]
Put
another way, as stated by Hershfield J. in Connolly v. R.,
2010 TCC 231, 2010 DTC 3357, in paragraph 19:
19 The definition of eligible
individual looks to the caregiver at a particular point in time; namely, the
first day of the month and the person who is the caregiver at that point in
time gets the whole month’s benefit. …
[26]
The
question then becomes what happens if no parent qualifies as the eligible
individual at the beginning of any month because the qualified dependant
resides with both parents at the beginning of the month and neither one is
“primarily” responsible for their care and upbringing at that point in time?
[27]
I
should add here that I do not consider the fact that the evidence shows that
the qualified dependants here were physically in the custody of the Appellant
on the first day of the month during three of the months during the Period
while in the custody of the father on the first such day during the other three
to mean the children “resided” with that particular parent on such first day. I
am in agreement with the analysis of the meaning of “residence” by Webb J. in Campbell
v. R., 2010 TCC 67, [2010] 3 C.T.C. 2114, who quite simply put it in paragraph
15:
15 … It is not simply a question
of which house she was at on the first day of any given month. Did she have a
settled and usual abode with the Appellant or …
[28]
In
that case of similar facts, Webb J. concluded in paragraph 17:
17 It seems clear to me that this
regular cycle of alternating between the Appellant’s home and Timothy
Campbell’s home [the father] continued throughout the period under appeal and
that the Child was residing with both parents throughout this period. The Child
had a settled and usual abode with both parents. …
[29]
I
too find in the case at hand that the two children of the Appellant and her
former spouse had a settled and usual abode with both parents during the entire
Period including at beginning of each month and every day afterwards.
[30]
Since
I find that both parents are, in the circumstances of this case, the parent
who can be said to be primarily responsible for the care and upbringing of the
children while in their custody exactly half of each month, then I must
conclude that since only one parent can be primarily responsible for their care
and upbringing during a minimum of a monthly period as confirmed in the Marshall
case above, then it follows that neither of them is the parent that is
primarily responsible for any entire month during the Period or the entire
Period as a whole. They are in fact equally responsible. As in the Campbell case above, where the
Court found it could not determine which of the parents was “primarily
responsible” during a period, I share the conundrum of Webb J. who stated in
paragraphs 35 and 36:
35 … However, the Act, in
relation to the CCTB, does not stipulate what will happen if both parents
equally fulfill the responsibility for the care and upbringing of the qualified
dependent …
36 It does not seem to me that the
correct result in this situation, where the Appellant and Timothy Campbell share
equally in fulfilling their responsibility for the care and upbringing of the
Child, is that neither parent should be entitled to the CCTB because neither
parent would be able to satisfy the requirement that such parent must be the
parent who primarily fulfills such responsibility. …
[31]
In
that case, Webb J. determined that the parents should alternate receiving the
benefits on a monthly basis during the period in question. In the case at hand,
the Minister decided to alternate between the Appellant and her husband on a
six‑month period in accordance with its policy of shared allocation. It
could have alternated entitlement on a monthly basis and I suspect if the
parties wish that result the Minister would likely agree to such request,
however it seems the Minister’s decision was to respect the Court Order issued
by the Provincial Court of British Columbia where the parties on consent agreed
to the six-month allocation, having regard to the fact it is a factor to
consider pursuant to Regulation 6302 as above mentioned.
[32]
I am
aware of this Court’s criticism in the past regarding the Minister’s shared
allocation policy, but am inclined to take the view such criticism was directed
more at the manner and circumstances in which the policy was utilized rather
than in the underlying policy itself. In Heubach v. R., 2010 TCC 409,
2010 DTC 4072, Boyle J. criticized the Canada Revenue Agency (“CRA”) for
sending a letter to the Appellant suggesting it had the authority to make an
order unilaterally for shared benefits without advising that if one of the
parties did not agree in writing it would have to make a determination as to
who the eligible individual was, then sought the return of payments when his
spouse challenged the allocation, and CRA made a determination she was the
eligible individual, after of course, he had relied on the CRA having that
unilateral authority. In that case, the Appellant’s spouse was specifically
named the parent primarily responsible for the children’s care and upbringing
in the Court Order granting custody and was a factor the CRA seemed to have
ignored to the Appellant’s detriment in having to repay the funds. In the case
at hand, the Court Order, issued on its face as a consent order, was in fact
respected by CRA who based their sharing allocation in accordance with it.
[33]
As
for the CRA’s authority for issuing a shared allocation decision, it seems
to me that if it is doing so in the context of issuing a determination on the
basis that such allocation was agreed to between the parties, whether such
agreement be found in a Court Order or by written consent directly contained in
a request to do so, then it clearly has such authority. I am also of the view
that in circumstances where there is no such direct consent or consent by Court
Order, that where one of the parents ceases to be the parent primarily
responsible for the care and upbringing of a qualified dependant on the basis
that due to shared custody arrangements and equal parenting circumstances it is
clear neither parent can fulfill that primary responsibility within the meaning
of section 122.6 of the Act, then it seems to me that the only
reasonable action CRA has is to impose a shared allocation under its policy. To
continue to pay benefits to a prior qualifying eligible individual when that
person ceases to qualify is equally offensive to the legislation. The fact is
the Act is silent on what happens in such circumstances and this Court
has previously sanctioned the CRA’s actions in such circumstances, both in the Campbell case above and in this
one.
[34]
Before
concluding this decision, I would like to comment on the Appellant’s plea to
find in her favour based on her economic situation. I sympathize with the
Appellant who diligently seeks whatever assistance she can to help support her
children, including applying for housing assistance, income assistance,
recreational credits and other government assistance, diligently shopping at
discount sources or food banks and so forth and applying for and utilizing a
credit card to use for food and other expenses, many of which were not for her
own use, in order to replace monies lost from not receiving the benefits in
question. I note too that the Appellant’s former spouse is only working part‑time
as a security guard up to 20 hours per week as he testified. However,
I agree with the Respondent’s counsel that granting relief solely on the
basis of unfairness would not be appropriate as the Federal Court of Appeal
decided in Chaya v.Canada, 2004 FCA 327, 2004 DTC 6676, that this Court
is not a court of equity and hence, as Rothstein J.A. stated in paragraph 4
thereof:
4 … The Court must take the
statute as it finds it. It is not open to the Court to make exceptions to
statutory provisions on the grounds of fairness or equity. …
[35]
Neither
the Act nor regulations thereunder provide that the parents’ relative
economic situation is a direct factor to be considered in determining which
parent is primarily responsible for the care and upbringing of the children.
[36]
In
conclusion, the Appellant has not discharged the onus of rebutting the
Minister’s assumptions. She has not met the onus of proving she is the parent
who is primarily responsible the care and upbringing of the qualified
dependants, her two daughters, during the Period and accordingly the
redeterminations of the Minister should stand and this appeal is dismissed
without costs.
Signed at Ottawa, Canada, this 15th day of December 2010.
“F.J. Pizzitelli”
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