Uwasomba v. The Queen, docket 2001-1298(IT)I (Informal Procedure)

Date: 20021211

Docket: 2001-1298-IT-I

BETWEEN:

VICTORIA CHINWE UWASOMBA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent,

2002-205(IT)I

AND BETWEEN:

CHRISTOPHER UWASOMBA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Beaubier, J.T.C.C.

[1]            These appeals pursuant to the Informal Procedure were heard together on common evidence at Toronto, Ontario on November 20, 2002. Both Appellants testified. Victoria insisted on being called "Victoria", so they will be referred to by their first names.

[2]            At the opening of the hearing the Respondent applied to amend the Replies to the Notices of Appeal. No amendments to the assumptions were allowed, but the remaining amendments were allowed.

[3]            Paragraphs 1 to 15 of the Amended Reply to Christopher's Notice of Appeal outline the matters in dispute between the parties. They read:

A.             STATEMENT OF FACTS

1.              With respect to paragraph 1 of the Notice of Appeal, he admits that the Superior Court of Justice issued a Certificate of Divorce to the Appellant and his spouse Victoria Chinwe Uwasomba (the "Spouse"), effective October 4, 1996. He otherwise denies the paragraph.

2.              With respect to paragraphs 2 and 3 of the Notice of Appeal, he admits that the Appellant has submitted a copy of a Separation Agreement (the "Agreement") signed by him and the Spouse in respect of the joint custody of their children and the payments to be made by the Appellant for the maintenance of the Spouse, the six children of the marriage (the "Children"), and their accommodations. He otherwise denies the paragraph.

3.              With respect to paragraph 4 of the Notice of Appeal he admits that the Canada Customs and Revenue Agency (the "CCRA") had reviewed the Appellant's returns of income for the 1991, 1992, 1993 and 1995 taxation years. However, he states that the review did not involve verification of the actual marital status of the Appellant at the time, only support payments the Appellant had deducted in those years were verified and the number of children for whom he claimed Ontario Tax Credit and Canada Child Tax Benefits (the "Benefits") was reduced to one, thus eliminating a duplication of claims by the Appellant and the Spouse. He further states that the CCRA's decision with respect to the marital status of the Appellant is based on the circumstances of each taxation year. He otherwise denies the paragraph.

4.              He denies all other allegations of fact and law contained in the Notice of Appeal.

5.              He admits the authenticity of the copies of the CCRA's letters mailed to the Appellant on August 10, 1994, October 31, 1994, July 24, 1996, October 15, 1996 and September 10, 2001, attached to the Notice of Appeal.

6.              In computing taxable income and taxes payable for the 1997, 1998 and 1999 taxation years, the Appellant deducted support payments made to the Spouse in the amounts of $11,000 for 1997 and $7,500 for 1998 (the "Deductions"), and claimed non-refundable tax credits for equivalent-to-spouse amounts of $3,640 for 1998 in respect of his son Collins and $5,718 for 1999 in respect of his son Jason (the "Personal Credits").

7.              The Minister of National Revenue (the "Minister") assessed the Appellant for the 1997, 1998 and 1999 taxation years as filed. The Notices of Assessment were mailed on March 16, 1998, April 15, 1999 and March 20, 2000, respectively.

8.              In reassessing the Appellant for the 1997, 1998 and 1999 taxation years, the Minister disallowed the Deductions and the Personal Credits claimed by the Appellant for those years and processed adjustments reflecting the actual marital status of the Appellant, affecting his claims for the Ontario Tax Credit and the Benefits. The concurrent Notices of Reassessment were mailed on December 11, 2000.

9.              In so reassessing the Appellant, the Minister made the following assumptions of fact:

(a)            all facts hereinbefore stated and admitted;

(b)            the Appellant and the Spouse divorced on October 4, 1996;

(c)            the Appellant and the Spouse reconciled and continued to cohabit after the divorce;

(d)            throughout the 1997, 1998 and 1999 taxation years, the Appellant was cohabiting in a conjugal relationship with the Spouse in the family residence at 46 Solway Avenue, Brampton, Ontario, together with their children;

(e)            during the 1997, 1998 and 1999 taxation years, the Appellant and the Spouse shared the expenses relating to their family residence and the parental responsibilities for the Children;

(f)             during the relevant period the Spouse was, and has remained to date, the beneficiary of any Registered Retirement Savings Plan or insurance policy the Appellant had;

(g)            during the 1997, 1998 and 1999 taxation years, the Appellant was not an unmarried person or a married person who neither supported nor lived with the married person's spouse and was not supported by the spouse;

(h)            during the 1997, 1998 and 1999 taxation years, Victoria Chinwe Uwasomba was the cohabiting spouse of the Appellant and the primary caregiver eligible to receive the Benefits in respect of the Children, as defined by section 122.6 of the Income Tax Act (the "Act");

(i)             in the 1997, 1998 and 1999 taxation years, the assessed net income of the Spouse was $11,069, $25,301 and $32,298, respectively.

B.             ISSUES TO BE DECIDED

10.           The issues for the 1997, 1998 and 1999 taxation years are:

(a)            whether Victoria Chinwe Uwasomba was the spouse of the Appellant for the 1997, 1998 and 1999 taxation years;

(b)            whether during the 1997, 1998 and 1999 taxation years the Appellant was living separate and apart from the Spouse;

(c)            whether the Appellant is entitled to deduct support payments for the 1997 or 1998 taxation years;

(d)            whether the Appellant is entitled to claim the Personal Credits in respect of any of the Children for the 1998 or 1999 taxation years; and

(e)            whether the Appellant is entitled to receive the Benefits in respect of any of the Children.

C.             STATUTORY PROVISIONS, GROUNDS RELIED ON AND REIELF SOUGHT

11.           He relies on sections 3, 9 and 122.6, subsections 118(1), 118(5), 248(1) and 252(4), and paragraphs 60(b), 118(1)(b) and 118(4)(b) of the Act as amended for the 1997, 1998 and 1999 taxation years.

12.           He submits that in the 1997, 1998 and 1999 taxation years, the Appellant was cohabiting with Victoria Chinwe Uwasomba in a conjugal relationship and she was his spouse in accordance with subsection 252(4) of the Act and therefore, the Appellant is not entitled to deduct support payments for those years under paragraph 60(b) of the Act.

13.           He submits that in the 1997, 1998 and 1999 taxation years, the Appellant was cohabiting with the Spouse in the same self-contained domestic establishment and therefore, he is not entitled to claims for those years the Personal Credits in respect of any of the Children under paragraph 118(1)(b) of the Act.

14.           In the alternative, he submits that as both the Appellant and the Spouse have claimed a credit for an amount under paragraph 118(1)(b) of the Act in respect of the same domestic establishment, and as the Minister has not received an agreement from the parties claiming such credit indicating who may claim the credit, the Appellant is not entitled to claim the credit for an Equivalent-to Spouse amount in respect of the 1998 and 1999 taxation years pursuant to paragraph 118(4)(b) of the Act.

15.           In the alternative that the Court finds that the Appellant is entitled to a deduction under paragraph 60(b) of the Act for support payments paid in the 1998 and/or 1999 taxation year, he submits that the Appellant is not entitled to claim a deduction under subsection 118(1) of the Act in respect of Collins and/or Jason for the 1998 and 1999 taxation years, respectively, pursuant to subsection 118(5) of the Act.

[4]            Assumption 9(b) was not refuted.

[5]            The Court's findings in these appeals are best summarized by reference to the criteria adopted by Lamarre Proulx, J.T.C. in Milot v. Canada, [1995] T.C.J. 412 in paragraph 12 of her reasons for judgment. By heading and subheading, those findings are as follows:

1.              Shelter

(a)            Did the parties live under the same roof?

At all material times the parties both lived at 46 Solway Avenue, Brampton, Ontario with their six children who were aged 6 to 18 in 1997. However, Christopher lived in the basement where he had his own "domestic establishment" within the meaning of section 118 of the Income Tax Act (the "Act"). He had the only key to the basement and he had keys to the rest of the house. Victoria and the children lived in the rest of the house in their separate "domestic establishment" within the meaning of section 118 of the Act. (It is noted that the only definition in section 248 of the Act refers to a "self-contained domestic establishment" and does not use the wording in section 118.) Victoria did not have a key to the basement, but had a key and access to the rest of the house. The children lived in the rest of the house with Victoria. Christopher prepared his meals in the kitchen, but kept his food in a separate refrigerator. Victoria prepared the meals for everyone else. Thus, in essence, Christopher's "roof" was the main floor of the house. Everyone else lived under the actual roof of the house.

(b)            What were the sleeping arrangements?

Christopher slept in his accommodation in the basement. Victoria slept in her own bedroom, which Christopher did not enter.

(c)            Did anyone else occupy or share the available accommodation?

The children visited Christopher's basement.

2.              Sexual and Personal Behaviour:

(a)            Did the parties have sexual relations? If not, why not?

They were divorced and did not have sexual relations with each other.

(b)            Did they maintain an attitude of fidelity to each other?

Christopher and Victoria did not have an attitude of fidelity to each other. Their marital relationship had terminated. Christopher now has other relationships. Victoria was not asked about other relationships.

(c)            What were their feelings toward each other?

Generally Christopher and Victoria do not speak to each other. They do quarrel about the children. They are tolerant of each other.

(d)            Did they communicate on a personal level?

Their personal communication was about the children.

(e)            Did they eat their meals?

They ate their meals in the same kitchen. The children could, and did, eat one or the other parent's food.

(f)             What, if anything, did they do to assist each other with problems or during illness?

This was not in evidence.

(g)            Did they buy gifts for each other on special occasions?

They each buy separate gifts for their children. From the general tenor of evidence and the appearance of the parties in Court, the Court finds that they did not buy presents for each other after the divorce.

3.              Services:

                What was the conduct and habit of the parties in relation to:

(a)            preparation of meals;

See above

(b)            washing and mending clothes;

There is one washer and dryer set and Christopher washes his clothes in it. Victoria washes the rest of the clothes.

(c)            shopping;

Each does his or her own shopping, including separate shopping for food.

(d)            household maintenance; and

Christopher owns the house, repairs and maintains it, pays the mortgage, taxes, utilities, etc. Christopher cleans the basement, Victoria cleans the rest of the house. Christopher does not enter Victoria's bedroom for any purpose.

(e)            any other domestic services?

They each clean their own premises in the house.

4.              Social:

(a)            Did they participate together or separately in neighbourhood and community activities?

Christopher is a practising member of the Church of England. Victoria is a practising Roman Catholic. Before the divorce they went to the same church. Now they each go to their own churches. Their social lives are separate and with separate groups. When in the same social group, they sit apart.

(b)            What was the relationship and conduct of each of them toward members of their respective families and how did such families behave towards the parties?

Each deals with the children separately. But normal day to day discipline has been conducted by Victoria. Christopher deals with them if they come to him. They have joint custody of the children. Victoria plans and deals with celebrations separately with the children.

5.              Societal:

What was the attitude and conduct of the community toward each of them and as a couple?

They do not make a social issue of their divorce. But their friends know that they are divorced. Victoria regards her divorce as a disgrace or a "taboo" in her church.

6.              Support (economic):

(a)            What were the financial arrangements between the parties regarding the provision of or contribution toward the necessaries of life (food, clothing, shelter, recreation, etc.)?

Christopher makes the payments imposed on him. The other financial relationships are as described. In addition Christopher will give the children money if they come to him for it and if he has it to give.

(b)            What were the arrangements concerning the acquisition and ownership of property?

Since the divorce what is his is his, and what is hers is hers.

(c)            Was there any special financial arrangement between them which both agreed would be determinant of their overall relationship?

Victoria is the beneficiary of Christopher's Registered Retirement Savings Plan "("RRSP") and was before the divorce. He has always regarded it as one-half hers. There is no evidence respecting contributions to his RRSP since the divorce. The children are the beneficiaries of Christopher's insurance but Victoria is the trustee for the children. They each appear to have their own bank accounts, credit cards, and other property.

7.              Children:

What was the attitude and conduct of the parties concerning the children?

Victoria is the person in charge of the physical and moral well being of the children. She cares for them, disciplines them and they live with her.

[6]            It is clear that the Appellants' domestic arrangements are carried out and designed to enable the Appellants to do the best that they can for their children within their limited means in today's very expensive world. Victoria is a night shift health care worker. She is a very strong-willed person. Christopher is presently a mechanic, but he does not appear to earn more than a modest living.

[7]            Therefore, in the 1997, 1998 and 1999 taxation years:

(a)            The Appellants did not cohabit in a conjugal relationship and Christopher is entitled to deduct any support payments for those years which he has claimed and which were paid pursuant to an appropriate Court Order or Agreement. Victoria, in turn, must include as income those support payments, if any.

(b)            The Appellants did not cohabit in the same domestic establishment. They were living separate and apart from each other during the years in question.

(c)            The children were residing with Victoria in her domestic establishment and Christopher is not entitled to claim Personal Credits in 1998 and 1999. Victoria is so entitled; she was the primary caregiver eligible to receive the Canada Child Tax Benefits and the Goods and Services Tax Credits. They are to be dealt with on the basis hereinbefore set out.

[8]            These appeals are referred to the Minister of National Revenue for reconsideration and reassessment accordingly.

                Signed at Vancouver, British Columbia, this 11th day of December, 2002.

"D. W. Beaubier"

J.T.C.C.COURT FILE NO.:                                   2001-1298(IT)I and 2002-205(IT)I

STYLE OF CAUSE:                                               Victoria Chinwe Uwasomba v. The Queen

                                                                                                Christopher Uwasomba v. The Queen

PLACE OF HEARING:                                         Toronto, Ontario

DATE OF HEARING:                                           November 20, 2002

REASONS FOR JUDGMENT BY:      The Honourable Judge D. W. Beaubier

DATE OF JUDGMENT:                                       December 11, 2002

APPEARANCES:

For the Appellants:                                               The Appellants themselves

Counsel for the Respondent:              P. Michael Appavoo

COUNSEL OF RECORD:

For the Appellant:                

Name:                               

Firm:                 

For the Respondent:                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

2001-1298(IT)I

BETWEEN:

VICTORIA CHINWE UWASOMBA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeals heard on common evidence with the appeals of

Christopher Uwasomba (2002-205(IT)I) on November 20, 2002

at Toronto, Ontario, by the Honourable Judge D. W. Beaubier

Appearances

For the Appellant:                                                                 The Appellant herself

Counsel for the Respondent:                              P. Michael Appavoo

JUDGMENT

                The appeals from the reassessments made under the Income Tax Act for the 1997, 1998 and 1999 taxation years are allowed and the reassessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.

                Signed at Vancouver, British Columbia, this 11th day of December, 2002.

"D. W. Beaubier"

J.T.C.C.

2002-205(IT)I

BETWEEN:

CHRISTOPHER UWASOMBA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeals heard on common evidence with the appeals of

Victoria Chinwe Uwasomba (2001-1298(IT)I) on November 20, 2002

at Toronto, Ontario, by the Honourable Judge D. W. Beaubier

Appearances

For the Appellant:                                                                 The Appellant himself

Counsel for the Respondent:                              P. Michael Appavoo

JUDGMENT

                The appeals from the reassessments made under the Income Tax Act for the 1997, 1998 and 1999 taxation years are allowed and the reassessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.

                Signed at Vancouver, British Columbia, this 11th day of December, 2002.

"D. W. Beaubier"

J.T.C.C.