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Citation: 2004TCC808
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Date: 20041209
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Docket: 2004-720(IT)I
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BETWEEN:
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CAROL BUMA,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent,
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and
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SIMON BUMA,
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Intervenor.
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REASONS FOR JUDGMENT
Sheridan, J.
[1] The Appellant Carol Buma is
appealing a redetermination of the Minister of National Revenue
that for the base years 2000 and 2001, she was not the
"eligible individual" within the meaning of section
122.6 of the Income Tax Act and therefore, not entitled to
the Child Tax Benefit. Ms. Buma's former spouse,
Simon Buma, was added as a Third Party under section 174 of
the Income Tax Act. He supports the Minister's
position that he was the "eligible individual" for the
period in question. It was agreed by the parties at the beginning
of the hearing that only the period April 2002 to October 2002 is
relevant to this appeal.
[2] The first issue in this appeal is
whether Ms. Buma resided[1] with her children. Ms. Buma has the burden of
disproving the Minister's assumption that she did not. Only
if she is successful in this threshold issue will it be necessary
to decide whether she was the parent who primarily fulfilled the
responsibility[2]
for the "care and upbringing" of the children. On this
issue, the onus shifts to the Crown to rebut the presumption
created under subsection 122.6(f)[3] that Ms. Buma, as the female parent,
fulfilled this role. If the Crown succeeds on this point, section
6302 of the Income Tax Regulations comes into play. In
making its determination of which parent primarily fulfilled the
responsibility for the "care and upbringing" of the
children, the Court must consider the factors listed in section
6302.
[3] The relevant provisions are set
out below:
Section 122.6 of the Income Tax Act:
"eligible individual" in respect of a qualified
dependant at any time means a person who at that time
(a) resides with the qualified dependant,
(b) is the parent of the qualified dependant who primarily
fulfils the responsibility for the care and upbringing of the
qualified dependant,
...
(f) where the qualified dependant resides with the
dependant's female parent, the parent who primarily fulfils
the responsibility for the care and upbringing of the qualified
dependant is presumed to be the female parent,
(g) the presumption referred to in paragraph (f) does
not apply in prescribed circumstances, and
(h) prescribed factors shall be considered in determining what
constitutes care and upbringing.
Section 6302 of the Income Tax Regulations:
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 hygenic 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.
[4] Both Ms. Buma and Mr. Buma
testified at the hearing. Prior to the breakup of their marriage,
they had operated a dairy farm together. Ms. Buma was responsible
for the running of the household but also shared in the milking
and other farm duties. They have four children who are
"qualified dependents"[4], as that term in defined in the Act.
Their marriage effectively ended on April 1, 2002. Although Ms.
Buma remained in the family home for that month and carried on
with her normal household and motherly duties, she and Mr. Buma
were living separate and apart in the residence. According to the
subparagraphs 11(c) and (i) of the Reply to the Notice of Appeal,
the Minister assumed that Ms. Buma left the family home on April
1, 2002; I find, however, that she did not move out until the
beginning of May 2002 after the family celebrated the birthday of
one of the children.
[5] Winding down a marriage is rarely
easy and is all the more difficult in the farm context where the
parties have shared not only a way of life, but a source of
income. Because Ms. Buma and her former spouse were in the
process of negotiating the division of the matrimonial property,
Ms. Buma was without the means to acquire a residence in which
she could be with the children, or to provide for them when they
were with her. For his part, during this period, Mr. Buma
continued to live and work on the farm. The children were with
him and although he had to see to their material needs, he also
had possession of the couple's only source of income - the
farm. Given this situation, he "advanced"[5] approximately $10,000
to Ms. Buma between April and October 2002 on the understanding
that adjustments would be made accordingly after the matrimonial
property settlement was completed. The evidence on the
matrimonial property division was incomplete and in any event, is
not the concern of this Court. I am satisfied, however, that the
parties ultimately agreed to a settlement that took these
advances into consideration in dividing the property.
[6] Their marital problems aside, both
parents hoped to preserve the children's life on the farm.
Ms. Buma testified that her primary concern was that the children
be able to grow up on the farm they love. It was with that in
mind that upon her departure in May 2002, Ms. Buma removed only
her personal belongings. All furnishings and appliances were
intended to remain at the farm with adjustments to reflect this
fact to be made upon the final distribution of property. She
sought temporary shelter with friends and family until October
31, 2002 when she took possession of her new home. During the
months of May and June, she spent her days at the farm continuing
to look after the children, to keep the house and, albeit to a
lesser extent, to help with the farm chores. After school ended
in June, Ms. Buma's time at the farm was significantly
reduced. She and the children spent a week camping together and
some time at the movies or other entertainment outings.
[7] Dealing first with the months of
May and June 2002, I am satisfied on the evidence before me that
for these months Ms. Buma continued to reside with the children.
The termination of her conjugal relationship with her former
spouse did not alter her maternal or farm worker role at the
family farm during this time. All that changed was that she did
not sleep at the house which, in my view, is not sufficient to
displace her status as being resident with the children.
[8] Having thus established her
residency under subsection 122.6(a), Ms. Buma is entitled
to the benefit of the presumption in subsection 122.6(f).
I find that the Minister has not shown on a balance of
probabilities that Ms. Buma was not the parent who primarily
fulfilled the responsibility for the care and upbringing of the
children during these two months. In his evidence, Mr. Buma
acknowledged her ongoing contribution not only to the care of the
children, but also to the running of the farm. I accept her
evidence that until the end of the school year, she continued to
get the children to school, make their lunches, pick them up from
school and take them to sports activities and medical/dental
appointments and help them with their homework. In addition, she
did all of the housework (including laundry, which Mr. Buma
admitted he did not master until sometime in July under the
guiding hand of his mother-in-law), the cooking of family meals.
These are exactly the sorts of activities contemplated by the
factors in section 6302 of the Income Tax Regulations. For
all of these reasons, I find that Ms. Buma was the "eligible
individual" for this period.
[9] By July 2002, however, things had
changed. Considering first the question of residency, I find that
Ms. Buma was no longer residing with the children during the
period July to October 2002. Her time with the children was much
reduced. At the farm, her presence was sporadic and limited, more
in the character of a visitor: after she left the farm, except
for the week she took the children on a camping trip, she was
without any suitable place to spend any significant amount of
time with them. Accordingly, the children passed most of their
school holiday time on the family farm with their father helping
with chores as their ages permitted, swimming in the family pool,
playing around outside. When they returned to school in the fall,
in their mother's absence, they organized themselves for
school, rode the school bus instead of being driven, took on
(with their father) the domestic chores that had once been the
domain of their mother. While I accept that their mother
sometimes brought them cakes and cookies when she visited, these
were in addition to the normal groceries and supplies at the
farm. All of the items needed in their daily lives - food,
clothing, bedding, toys, school books, and other household items
such as the telephone - were located at the farm. I do not doubt
that Ms. Buma's emotional bond with and her concern for her
children remained as strong as in the previous period, but the
notion of physical residency is something apart from that
connection. On these facts and for the purposes of the
Act, it is difficult to see how Ms. Buma can be said to
have resided with her children between July and October 2002.
Given this finding, the residency requirement in subsection 122.6
has not been satisfied. This is sufficient to preclude Ms. Buma
from claiming the "eligible individual" status for this
period. I further find that Mr. Buma was residing with the
children during this time and fulfilled the primary
responsibility for their care and upbringing.
[10] Accordingly, the appeal is allowed and
the Minister's redetermination in respect of the 2000 and
2001 base taxation years is referred back to the Minister of
National Revenue for redetermination on the basis that the
Appellant, Carol Buma was the "eligible
individual" for the months of May and June 2002 and that the
Third Party, Simon Buma was the "eligible
individual" for the months July, August, September and
October 2002.
Signed at Ottawa, Canada, this 9th day of December, 2004.
Sheridan, J.
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