Citation: 2008TCC104
Date: 20080219
Docket: 2007-861(IT)I
BETWEEN:
MARIE AUKSTINAITIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Rip A.C.J.
I.
INTRODUCTION
[1] These appeals,
heard under the informal procedure, pertain to the 2002, 2003 and 2004 base
years. The Minister of
National Revenue ("the Minister") assessed the Appellant for the
periods under appeal, and, based on the assumption that Marc Mongeon was
her common-law partner, disallowed the Goods and Services Tax Credit
("GSTC") and the Canada Child Tax Benefit ("CCTB"). Consequently, the Minister
assessed the Appellant for the periods from July 2005 to June 2006
and July 2003 to June 2006 for the deemed CCTB and GSTC overpayments.
[2] The Minister based
his assessments on the following facts:
[TRANSLATION]
(a) The Appellant and Marc
Mongeon have a child. (confirmed by the Appellant)
(b) The child was born
on September 30, 2000. (confirmed by the Appellant)
(c) The Appellant and
Marc Mongeon lived together throughout the relevant period.
(d) The Appellant and Marc
Mongeon shared certain financial responsibilities throughout the relevant
period.
(e) The Appellant and
Marc Mongeon jointly assumed responsibility for the care and upbringing of the
child throughout the relevant period.
[3] Thus, the issue for
determination in the instant case is whether Marc Mongeon was the
Appellant's common-law partner during the periods under appeal.
II. FACTS
[4] It should be noted that Marc Mongeon did
not appear at the hearing of this appeal, even though he was served with a
notice of appearance.
[5] The Appellant and Marc Mongeon lived together
as common-law partners from 1999 to March 17, 2001. Their child was
born during this period.
[6] On September
27, 2001, following the breakdown of their relationship, the Quebec Superior
Court issued an agreement concerning the child's shared custody. Marc Mongeon subsequently had another
common-law partner, and a second child was born from that relationship. In
2003, Marc Mongeon separated from this second common-law partner. He declared
personal bankruptcy in November 2003.
[7] Mr. Mongeon then went to live with the
Appellant from the beginning of 2004 to July 2006. It is this period of cohabitation
that gave rise to the instant appeal.
III. THE PARTIES' POSITIONS
[8] The Appellant clearly did not consider
herself to be Mr. Mongeon's common-law partner during the periods in
issue. In her submission, they were merely cohabiting and sharing the custody
of their child in accordance with a Superior Court order, and nothing more.
Hence, she claims to be entitled to the credits that were disallowed.
[9] By contrast, the
Respondent submits that the Appellant and Mr. Mongeon were common-law
partners during the periods in issue. Based on this determination,
the Respondent submits that the Appellant is not entitled to the credits in
issue.
V. ANALYSIS
[10] The income of the
common-law partner must be taken into account in computing the GSTC and CCTB.
[11] Subsection 248(1) of the Income Tax Act
defines "common-law partner" for the purposes of the Act as follows:
"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),
and for the purposes of this definition, where at any time the
taxpayer and the person cohabit in a conjugal relationship, they are, at any
particular time after that time, deemed to be cohabiting in a conjugal
relationship unless they were not cohabiting at the particular time for a
period of at least 90 days that includes the particular time because of a breakdown
of their conjugal relationship;
[12] For the purposes of the GSTC and CCTB,
section 122.6 of the Act defines "cohabiting spouse or common-law
partner" as follows:
"cohabiting spouse or common-law partner" of
an individual at any time means the person who at that time is the individual’s
spouse or common-law partner and who is not at that time living separate and
apart from the individual and, for the purpose of this definition, a person
shall not be considered to be living separate and apart from an individual at
any time unless they were living separate and apart at that time, because of a
breakdown of their marriage or common-law partnership, for a period of at least
90 days that includes that time;
[13] The former
subsection 252(4) defined the terms "spouse" and
"marriage". In Milot
v. The Queen, my colleague Lamarre
Proulx J. wrote the following:
11 This definition [the former subsection
252(4)] leads us to consider the notion of conjugal relationship. When can two
persons be considered as living in a conjugal relationship? This notion has
often been studied for the purposes of various statutes. In Quebec, for example, this notion was
studied in particular for the application of the Automobile Insurance Act,
R.S.Q., c. A-25, s. 2, para. 2, and the Act respecting the Québec Pension
Plan, R.S.Q., c. R-9, s. 91. See Les personnes et
les familles, Knoppers, Bernard et Shelton, Tome 2, Les éditions Adage, the
first chapter of which is entitled "Les familles de fait". It states that cohabitation is fundamental in a conjugal
relationship and in conjugal conduct. That conduct may be determined through
sexual relations, emotional and intellectual exchange, financial support and
common knowledge.
[14] Lamarre Proulx J. went on to apply the
factors developed by Kurisko D.C.J. in Molodowich v. Penttinen to
determine what a conjugal relationship is. The judgment of the Ontario District
Court provides more precisely what constitutes cohabitation or a conjugal or marriage-like
relationship. Specifically, Kurisko D.C.J. provides the following list of relevant
points:
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,
(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 towards 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 towards 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 towards 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:
What was the attitude and
conduct of the parties concerning children?
As Kurisko D.C.J. further observed, the extent to
which each of the aforementioned seven different components will be taken into
account must vary with the circumstances of each particular case.
[15] The approach laid down in Molodowich was
later approved by the Supreme Court of Canada in M v. H. As stated there,
it should be borne in mind that these factors must not be followed blindly but
rather applied based on the specific facts of each case:
59 Molodowich v. Penttinen
(1980), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), sets out the generally accepted characteristics of a
conjugal relationship. They include shared shelter, sexual and personal
behaviour, services, social activities, economic support and children, as well
as the societal perception of the couple. However, it was recognized that these
elements may be present in varying degrees and not all are necessary for the
relationship to be found to be conjugal. While it is true that there may
not be any consensus as to the societal perception of same‑sex couples,
there is agreement that same‑sex couples share many other "conjugal"
characteristics. In order to come within the definition, neither opposite‑sex
couples nor same‑sex couples are required to fit precisely the
traditional marital model to demonstrate that the relationship is "conjugal".
60 Certainly an opposite‑sex couple
may, after many years together, be considered to be in a conjugal relationship
although they have neither children nor sexual relations. Obviously the
weight to be accorded the various elements or factors to be considered in
determining whether an opposite‑sex couple is in a conjugal relationship
will vary widely and almost infinitely. The same must hold true of same‑sex
couples. Courts have wisely determined that the approach to determining
whether a relationship is conjugal must be flexible. This must be so, for
the relationships of all couples will vary widely. In these
circumstances, the Court of Appeal correctly concluded that there is nothing to
suggest that same‑sex couples do not meet the legal definition of "conjugal".
[16] In Rangwala v. Canada, Campbell J.
also emphasized the importance of applying the test flexibly in order to take
the facts of each case into consideration, by adopting the remarks made by
Wilson J. in Macmillan-Dekker v. Dekker:
23 He also states
that:
. . .
I conclude that
there is no single, static model of a conjugal relationship, nor 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.
[17] In Sanford v. Canada, affirmed
by the Federal Court of Appeal,
Morgan J. noted that a taxpayer's civil status should determined by
objective standards, not by subjective attitudes.
[18] All of this must be
taken into consideration in applying Milot to the specific facts of the
instant case.
[19] In fact, the Appellant responded to each factor of this
test.
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?
[20] Clearly, the
Appellant and Marc Mongeon lived under the same roof with their son, and
Mr. Mongeon's other son sometimes lived with them. Nonetheless, the
Appellant testified that they each had their own bed and their own room.
[21] It is settled law that the mere fact that
two people live together is not sufficient to conclude that they are common-law
partners.
In fact, in Kelner v. Canada,
Bowman J. (as he then was) stated as follows:
17 I start from
the premise that it is possible for spouses, as a matter of law, to live
separate and apart even though they are under the same roof.
18 In Murphy v.
Murphy [1962] NSWR 417 Nield J. said at p. 424:
There is the old story of "absence making the heart grow
fonder"; but when people have an inability to accommodate themselves to
one another, and are forced to occupy the same dwelling, to live under the same
roof, with that difference in feeling; then the antagonisms build up and build
up, as they see one another day after day; and the possibility of their ever
coming together again becomes more and more remote and they tend to be more and
more separated, by their hostility to one another, and apart from one another,
in that they have nothing in common at all. I can see no reason in logic why
one cannot say of people living under the same roof that they are living
separate and apart; just as if they were living in different home.
19 I tend to think that Nield J.
may have gone a little further than our courts would have. Courts in Canada have however recognized that parties may live
separate and apart even though they are under one roof. Rushton v. Rushton [1969]
66 W.W.R. 764; Tuomi v. Ungarian [1991] 5 W.W.R. 424.
[22] To hold otherwise
could result in absurd consequences in a modern context where former common-law
partners, who have no chance of reconciliation, sometimes decide to continue to
live together for the welfare of their child or simply because they cannot
financially afford not to.
[23] The fact that the
Appellant lived with Mr. Mongeon
under the same roof is not fatal to her case. It is actually only one of the
factors to take into account.
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?
[24] The Appellant stated
that she had no sexual relations with Mr. Mongeon, and had no other partners during the periods in
issue. Apart from trying to maintain good communications with Mr. Mongeon
for the welfare of their child, and having eaten at the same time as him in
rare instances, nothing suggests to me that this second factor militates
against the Appellant. On the contrary, it seems that the contacts and
exchanges between the Appellant and Mr. Mongeon were minimal and limited
to what one would expect of anyone who has to live with another person, share
certain spaces with that person, and try to live in a civilized manner.
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,
(e)
Any other domestic
services?
[25] It appears that household maintenance and
dishwashing were the only things that were essentially done by the Appellant.
All other duties were apparently shared. I do not see how this factor
could either favour or oppose the existence of a conjugal relationship in the
case at bar. In my opinion, it is not a decisive factor here.
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 towards 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 towards each of them and as a couple?
[26] Based on the Appellant's
testimony, these criteria weigh heavily against a finding that there was a
common-law partnership, because the Appellant and Mr. Mongeon did no social activities together,
did not visit each other's families, did not introduce themselves as
partners, and were not considered partners.
6. Support (Economic):
(a)
What were the
financial arrangements between the parties regarding the provision of or
contribution towards 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?
[27] The extent of Mr. Mongeon's financial
contribution to this cohabitation is unclear, but it appears that he covered at
least the excess costs that his presence generated. It is true that such an
arrangement could, at first sight, appear “abusive” for people who are not
living in a common-law partnership. But one must bear in mind that
Mr. Mongeon went to live with the Appellant after going bankrupt, and that
she wanted him to be in a position to leave her residence as quickly as
possible.
(7)
Children:
What was the attitude and
conduct of the parties concerning children?
[28] With respect to the
last factor, there is a judgment of the Quebec Superior Court under which the
Appellant and Mr. Mongeon have shared custody of their son. There is
nothing in the evidence submitted before me that causes me to doubt that they
were complying with this order even though they lived under the same roof.
As the Appellant admitted, they did sometimes exchange custody‑related
duties, such as where the parent who did not have custody during a certain week
would go to pick up the child at school because the other parent had to work
late.
Conclusion
[29] A few factors favour
the existence of a common-law relationship, but the majority do not.
[30] Despite the Appellant's submissions, it is
clear that, during the period in issue, she and Marc Mongeon lived together,
shared certain financial responsibilities and were jointly responsible for the
care and upbringing of their child.
[31] Marc Mongeon and their son nonetheless each
had a separate room. Mr. Mongeon also had his own fridge, and each person
looked after his or her own grocery shopping. Mr. Mongeon stored the rest
of his personal belongings at the Appellant's house, but used only what was
necessary to furnish his room. The Appellant wanted Mr. Mongeon to be
able to leave as easily and quickly as possible when the time came, and she wanted
to avoid arguments concerning what belonged to him upon his departure.
[32] The Respondent presented Marc Mongeon's
income for the years in issue with a view to showing that he did not in any way
depend on the Appellant's financial assistance during that period. Perhaps so,
but everything suggests that the Appellant was unaware of this, and that she
merely wanted to ensure her child's welfare pending Mr. Mongeon's
discharge from bankruptcy.
[33] The Appellant's
testimony ranked very high in terms of its credibility, and aside from the fact
that I disagree with the terms that she uses to describe certain facts, I have
to believe her. In addition, the fact that Mr. Mongeon did not testify benefited
the Appellant. Thus, I accept the Appellant's testimony. Consequently, the
burden was on the Respondent to overturn this finding, but since the Respondent
did not adduce anything more than Mr. Mongeon's income during the periods
in issue, I have no choice but to find for the Appellant.
[34] When the Appellant decided
to house her ex-partner temporarily, she was merely trying to be a responsible
parent, and she should not be penalized for that.
[35] Based on all of the
foregoing, I find, on a balance of probabilities, that the Appellant and
Mr. Mongeon were not common-law partners during the periods in issue.
[36] I therefore allow
the appeal, with costs, if any, and refer the assessments back to the Minister
for reconsideration on the basis that Ms. Aukstinaitis's CCTB and GSTC are to be remitted to her.
Signed at Ottawa, Canada, this 19th day of February 2008.
"Gerald J. Rip"
Translation certified true
on this 11th day of April 2008.
Susan Deichert, Reviser
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