Citation: 2007TCC390
Date: 20070718
Docket: 2006-2725(IT)I
BETWEEN:
RAYMONDE DRYSDELLE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Angers J.
[1] By notices of
assessment dated May 29, 2003, March 18, 2004, and
March 3, 2005, the Minister of National Revenue
("the Minister") determined the Appellant's tax liability for
the 2002, 2003, and 2004 taxation years, respectively.
[2] By notice of
reassessment dated October 11, 2005, the Minister notified the
Appellant that her claim of a credit for a wholly dependent person was being disallowed
for the 2002, 2003 and 2004 taxation years ("the relevant period")
because she had a common-law partner.
[3] The Minister reassessed
the Appellant's eligibility for the Canada Child Tax Benefit and assessed her
for a $221.16 overpayment, computed as follows:
2002 base year, for the months of July 2003 to June 2004: $85.67
2003 base year, for the months of July 2004 to June 2005: $100.78
2004 base year, for the months of July 2005 to September 2005: $34.71
Total overpayment: $221.16
[4] The Minister reassessed
the Appellant's eligibility for the National Child Benefit Supplement, and assessed
a $3,125.22 overpayment, calculated as follows:
2002 base year, for the months of July 2003 to June 2004: $1,463.00
2003 base year, for the months of July 2004 to June 2005: $1,354.97
2004 base year, for the months of July 2005 to September 2005: $307.25
Total overpayment: $3,125.22
[5] The Minister reassessed
the Appellant's eligibility for the Goods and Services Tax/Harmonized Sales Tax
Credit, and assessed a $1,154.85 overpayment, calculated as follows:
2002 base year, for the quarters ended in July and
October 2003 and in January and April 2004: $322.05
2003 base year, for the quarters ended in July and October 2004
and in January and April 2005: $545.80
2004 base year, for the quarters ended in July and October 2005: $287.00
Total overpayment: $1,154.85
[6] The Appellant
objected to the assessments and the Minister confirmed all of them on June 6, 2006. Hence, the Appellant
is appealing the assessments before this Court. The issue for determination is
whether the Appellant and one Conrad Duclos lived as common-law partners
during the relevant period.
[7] The Appellant
settled in the Miramichi area roughly 12 years ago. At that time, she met Conrad
Duclos, and he invited her to come live with him. Having trouble making ends
meet, she accepted. The Appellant looks after the maintenance of the
house, prepares meals and does the cleaning for all the house's occupants,
namely Mr. Duclos, his son, the Appellant and her daughter Karine. Mr. Duclos
defrays all household expenses, including food. The Appellant contributes to
the food costs only when she has extra money, a rare occurrence according to
her.
[8] The house in which
they live has three bedrooms on the ground floor and two in the basement. For
roughly the past two years, the Appellant, her daughter and Mr. Duclos have
been occupying the three bedrooms on the ground floor. The Appellant says
that she previously had a bedroom in the basement. The house is on Rioux Street in Saint‑Isidore,
New Brunswick.
[9] Karine Saulnier testified
to confirm her mother's statements concerning the circumstances that led them
both to live in Mr. Duclos's home. She was 12 years old at the time. She
testified that her mother and Mr. Duclos are friends and that she never
considered them spouses. She also said that she never saw her mother sleep with
Mr. Duclos. However, she acknowledges that they go out to a restaurant together
once or twice a month and that Mr. Duclos does this out of gratitude.
On cross‑examination, she admits that she was very close to her
mother.
[10] Rather astonishingly,
the Appellant has been stating her mother's Tilley Road address on her income
tax returns since resettling in New Brunswick. She says that this failure to
change her address to Mr. Duclos' is due to negligence on her part.
She admits that, upon applying for a credit card, she gave Mr. Duclos'
address. The Respondent also tendered in evidence the registration
certificates for her two vehicles, and the address on those documents is Mr.
Duclos' address. Another exhibit, from the Centre hospitalier de Tracadie,
indicates her mother's street address but Mr. Duclos' telephone number. The
Appellant testified that she used Mr. Duclos' address on all other
correspondence following her move.
[11] The Appellant also
acknowledges that they went on social outings to restaurants, but that they did
so as friends. According to the Appellant, Mr. Duclos likes taking her to
the restaurant because she does all the housework and he likes to give her a
treat. She also acknowledges that they ate together at home. She says
that she has no men in her life and does not know what people in the community
say about them.
[12] Daniel Blacquière is
an auditor with the Canada Revenue Agency. He audited Mr. Duclos' tax
returns in 2005. He noticed that the Appellant and Mr. Duclos were living
together under one roof. In the course of the audit, which was conducted using
the net worth method, he asked Mr. Duclos to draw up the list of his personal
expenses. During a conversation with Mr. Duclos on June 9, 2005,
concerning the personal expense form that he gave the auditor, Mr. Duclos apparently
said that his wife filled out the form with the help of his accountant.
[13] The auditor stated
that, at his first meetings with Mr. Duclos, Mr. Duclos asked him to
include the salary of his spouse or wife (he is not sure exactly what term was
used) in the net worth calculations. This led Mr. Blacquière to investigate
the Appellant's address, whereupon he noticed that she used her mother's
address for the purposes of her income tax returns and employment insurance
benefits. In fact, she used her mother's address for the purposes of the
instant appeal. He checked the addresses on the Appellant's automobile
registration certificates, and Mr. Duclos' address was on them. He then
included the Appellant's income in Mr. Duclos' net worth calculations.
[14] Mr. Blacquière testified
that he sent a letter of proposal to the Appellant at the Rioux Street
address on August 19, 2005, stating that her civil status was
different from what was stated on her income tax returns (the Appellant's
returns said that she was single). Having obtained no answer, he phoned the
Appellant at Mr. Duclos' residence, and she admitted to him over the phone that
she received the letter sent to the Rioux Street address. She confirmed to him that
she was Mr. Duclos' common-law partner for the three years in issue and
that she did not know the difference between a common-law partner and a single
person. Consequently, they made the change. The Appellant, for her part, says
that she did not say this, that she did not admit such a fact, and that she actually
told him that she and Mr. Duclos were not partners.
[15] The term
"common-law partner" is defined as follows in the Income Tax Act:
"common-law partner", with
respect to a taxpayer at any time, means a person who cohabits at that time in
a conjugal relationship with the taxpayer and
(a) has so
cohabited with the taxpayer for a continuous period of at least one year, or
(b) would be
the parent of a child of whom the taxpayer is a parent, if this Act were read
without reference to paragraphs 252(1)(c) and (e) and
subparagraph 252(2)(a)(iii),
. . .
[16] Several decisions
have addressed whether two persons were "common‑law partners"
for the purpose of determining whether they were living "separate and apart"
under one roof or were in a conjugal relationship. In Benson v. The Queen,
Docket No. 2002-436(IT)I, O'Connor J. of this Court applied
the criteria adopted in Molodowich v. Penttinen (1980), 17 R.F.L. (2d) 376,
and subsequently applied in Kelner v. Canada, Docket No. 94-868(IT)I,
[1995] T.C.J. No. 1130, Rangwala v. Canada, Docket No. 2000-993(IT)I,
[2000] T.C.J. No. 624, and Roby v. Canada,
Docket No. 2001-3029(IT)I, [2001] T.C.J. No. 801.
Those criteria are as follows:
1. Shelter:
(a)
Did the parties live under the same roof?
(b)
What were the sleeping arrangements?
(c)
Did anyone else occupy or share the available
accommodation?
2. Sexual and Personal Behaviour:
(a)
Did the parties have sexual relations? If not, why not?
(b)
Did they maintain an attitude of fidelity to each other?
(c)
What were their feelings toward each other?
(d)
Did they communicate on a personal level?
(e)
Did they eat their meals together?
(f)
What, if anything, did they do to assist each other
with problems or during illness?
(g)
Did they buy gifts for each other on special occasions?
3. Services:
What was the conduct and habit
of the parties in relation to:
(a) preparation of meals;
(b) washing and mending clothes;
(c) shopping;
(d) household maintenance; and
(e) any other domestic services?
4. Social:
(a)
Did they participate together or separately in
neighbourhood and community activities?
(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?
5. Societal:
What was the attitude and conduct of the
community toward each of them and as a couple?
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.)?
(b) What were the
arrangements concerning the acquisition and ownership of property?
(c) Was there any special
financial arrangement between them which both agreed would be determinant of
their overall relationship?
7. Children:
(a) What
was the attitude and conduct of the parties concerning the children?
[17] As specified in Rangwala,
supra, "each of the criteria must be given its proper weight in the
context of each particular case in determining whether a conjugal relationship
exists or not."
[18] In Roby, supra,
Chief Judge Bowman had to decide whether two spouses were living separate and
apart in order to determine whether the appellant spouse was entitled to the
Canada Child Tax Benefit and the credit for a wholly dependent person. He
stated:
[7] In Kelner v. R.,
[1996] 1 C.T.C. 2687, I reviewed the case law in this area and concluded that
it was possible for spouses to live "separate and apart" even where
they were living under the same roof. This is an unassailable proposition as a
matter of law, but as a matter of fact in any given case the evidence should be
convincing. Campbell J. in Rangwala v. R., [2000] 4 C.T.C. 2430, and Raghavan
v. R., [2001] 3 C.T.C. 2218, reached the same conclusion.
[8] As good a starting point as any is the
decision of Holland J. in Cooper v. Cooper, (1972) 10 R.F.L.
184 (Ont.H.C.) where he said at p. 187:
Can it be said that the parties in this case are
living separate and apart? Certainly spouses living under the same roof may
well in fact be living separate and apart from each other. The problem has
often been considered in actions brought under s. 4(1)(e)(i) of the Divorce Act
and, generally speaking, a finding that the parties were living separate and
apart from each other has been made where the following circumstances were
present:
(i) Spouses occupying separate
bedrooms.
(ii) Absence of sexual relations.
(iii) Little, if any, communication
between spouses.
(iv) Wife performing no domestic
services for husband.
(v) Eating meals separately.
(vi) No social activities together.
See Rushton v. Rushton (1968),
1 R.F.L. 215, 66 W.W.R. 764, 2 D.L.R. (3d) 25 (B.C.); Smith v. Smith
(1970), 2 R.F.L. 214, 74 W.W.R. 462 (B.C.); Mayberry v. Mayberry,
[1971] 2 O.R. 378, 2 R.F.L. 395, 18 D.L.R. (3d) 45 (C.A.).
[9] Both Campbell J. and I took those
criteria as useful guidelines, although they are by no means exhaustive and no
single criterion is determinative. I tend to agree with what was said by Wilson
J. in Macmillan-Dekker v. Dekker, August 4, 2000, docket 99-FA-8392,
quoted by Campbell J. in Rangwala at pp. 2435-2436:
Based on a synthesis of prior case law, the court
established a list of seven factors to be used to determine whether or not a
conjugal relationship exists or existed. These organising questions permit a
trial judge to view the relationship as a whole in order to determine whether
the parties lived together as spouses. Reference to these seven factors will
prevent an inappropriate emphasis on one factor to the exclusion of others and
ensure that all relevant factors are considered.
. . .
I conclude that there is no single, static model
of a conjugal relationship, or of marriage. Rather, there are a cluster of
factors which reflect the diversity of conjugal and marriage relationships that
exist in modern Canadian society. Each case must be examined in light of its
own unique objective facts.
[10] Bearing in mind then that no single factor
should predominate, and that it is the overall picture that must ultimately
govern, can it be said that these spouses were living separate and apart
because of the breakdown of their marriage?
[19] It must be noted that
the burden is on the Appellant to show, on a balance of probabilities, that she
was not in a conjugal relationship with Mr. Duclos (see Richard v.
Canada, 2003 TCC 774, and Drolet v. Canada, 2004 TCC 538). I acknowledge
from the outset that it is possible for two unmarried people to live under one
roof but not be common‑law partners, just as it is possible for two
spouses to be separated even though they are living under one roof. As Judge Bowman
stated, this "is an unassailable proposition as a matter of law, but as a
matter of fact in any given case the evidence should be convincing."
[20] Here, the Appellant
contends that she is single and that she lives in Mr. Duclos' home, not
with him. She does not share the same bedroom, and merely lives there. This
suits Mr. Duclos and it suits the Appellant, who was experiencing
financial difficulties at the time that they made their arrangement.
However, the evidence does not tell us why the Appellant could not
continue living with her mother after returning to the Miramichi area in view
of her financial difficulties, nor did it show why she continues to live in Mr.
Duclos' home now that her financial health appears to have been restored.
[21] The Appellant has
been living in Mr. Duclos' home for close to 10 years. She does all the
housework, prepares the meals for all the occupants of the home and eats her
meals with Mr. Duclos. She does not contribute or pay for a thing, other
than a bit of money on the groceries if she has some extra money available in
her budget. The Appellant and Mr. Duclos go out to a restaurant together
once or twice a month, a treat offered by Mr. Duclos to the Appellant. In my
view, this situation appears to be more consistent with life as a couple than
with the relationship described by the Appellant. The fact that Mr. Duclos offers
the same treatment to the Appellant's daughter, at least in terms of food and
lodging, makes this clearer. He almost acts as a parent to the Appellant's
daughter. This is admittedly a very unusual situation where the evidence must
be very convincing, as Judge Bowman stated.
[22] According to the
Appellant and her daughter, Mr. Duclos' room is his alone. The Appellant
testifies that they have no sexual relations, and her daughter testified to
confirm this assertion. In my opinion, it is difficult to give weight to
this confirmation by the Appellant's daughter because this is not the kind of
activity that she can confirm or deny. She can, and in fact did, testify that
she does not consider the two of them spouses. However, she would have had to provide
more details about this last point so that her assertion could be better
understood.
[23] One must also ask
oneself why the Appellant did not provide her accurate address on any of her
tax returns for almost ten years. This same mistake is made in her employment
insurance claims and in the Notice of Appeal in the instant case. This issue
takes on relevance because she uses Mr. Duclos' address and telephone
number for her motor vehicle registrations and her credit cards.
[24] I cannot disregard
the auditor's conversations with Mr. Duclos, in which Mr. Duclos
referred to the Appellant as his wife or partner. Although these conversations constitute
hearsay evidence to which little weight should generally be given, the fact
remains that the Appellant confirmed the conversation that she had with the
auditor after receiving his letter of August 19, 2005. It was
during this conversation that the Appellant acknowledged that she was
Mr. Duclos' common‑law partner. This was a spontaneous answer on her
part, and, in my opinion, it confirms that the Appellant played a more
important role in her relationship with Mr. Duclos than she would have us
believe. Having regard to all the factors, and, in particular, the relationship
between the Appellant and Mr. Duclos as a whole, it is more likely than
not that the Appellant and Mr. Duclos are common‑law partners.
[25] Consequently, the
Appellant has not met her burden of proof. I cannot disregard the fact that
Mr. Duclos did not testify in the case at bar. In my opinion, it would
have been very important to obtain his testimony, and, in view of the significance
of the point in issue, I do not find the explanation that he was very busy at
work justifiable. I can only infer that his testimony would not have been
favourable to the Appellant. The appeal is dismissed.
Signed at Edmundston, New Brunswick, this 18th day of July 2007.
"François Angers"
Translation
certified true
on this 16th day
of August 2007.
Brian McCordick,
Translator
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