Alcayaga v. The Queen, docket 2000-3565-IT-I (Informal Procedure)

Date: 20010703

Docket: 2000-3565-IT-I

BETWEEN:

TERESITA ALCAYAGA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Teskey, J.

[1]            The Appellant appeals her assessment of income tax for the years 1996, 1997 and 1998 and in her Notice of Appeal, she elected the informal procedure.

Issue

[2]            The sole issue before the Court is whether the Appellant, during the three years in question, was living in a common-law relationship with Michael Mutambirwa in a self-contained domestic establishment maintained by them.

Facts

[3]            The facts assumed by the Minister of National Revenue (the "Minister") when he made the assessment were reproduced in the Reply to the Notice of Appeal and those that are pertinent to these reasons are:

(a)            in filing her income tax return for the 1992 taxation year, Teresita Alcayaga reported "Mich" (more properly known as Michael) as her common-law spouse and indicated the Social Insurance Number of the Michael Mutambirwa as being that of Mich;

(b)            in filing his income tax return for the 1993 taxation year, Michael Mutambirwa reported "Tess" (more properly known as Teresita) as his common-law spouse;

(c)            in 1997, the Appellant and Michael Mutambirwa jointly purchased 9 Janet Boulevard, Scarborough, Ontario, a residential property for uses as their principal residence;

(d)            in 1996 and 1997, the Appellant and Michael Mutambirwa jointly rented a safety deposit box at the Toronto Dominion Bank at 4841 Yonge Street, Toronto, Ontario;

(e)            in the 1996, 1997 and 1998 taxation years, the Appellant was not an unmarried person or a married person who neither supported or lived with his spouse and is not supported by her spouse;

(f)             the Appellant has one child, Marc, who, at all material times, was under 18 years of age (the "Child");

(g)            in the 1997 and 1998 taxation years, the Appellant and her common-law spouse, Michael Mutambirwa, resided in the same self-contained domestic establishment with the Child;

(h)            in the 1997 and 1998 taxation years, the Appellant was not because of a breakdown of her marriage, living separate and apart from her spouse at the end of the year and for a period of at least 90 days beginning in the year;

[4]            In regards to these various paragraphs, my finding are as follows:

(a) ¾ the facts contained there are true as there isn't any acceptable evidence to the contrary and there is supporting evidence before me, namely Exhibit R-1;

(b) ¾ the facts contained there are true. Michael admitted this fact but stated that it was a mistake. I do not accept this simple denial and find as a fact that he and the Appellant were living together in a common-law relationship;

(c), (d) and (f) ¾ the facts contained in these subparagraphs are not denied and they stand;

(e), (g) and (h) ¾ acceptable evidence was received that changes and refutes partially the facts contained in these subparagraphs;

[5]            I find that Michael's and the Appellant's testimonies cannot be accepted in whole and is only accepted in part where there is documentary evidence to support the various facts given in their oral testimony.

[6]            Michael's explanation for showing the Appellant as his common-law spouse in his 1992 T1 tax return, "it was a mistake", is not accepted. This had to have been deliberately inserted into the return.

[7]            Both the Appellant and Michael admitted that they had an intimate relationship but denied that they were living together in a common-law relationship. I reject the latter and specifically find that they were living in a common-law relationship in 1996 and part of 1997.

[8]            When Michael was confronted with his Land Transfer Tax Affidavit on the deed of conveyance from the Appellant to him (Exhibit A-24), he just dismissed the error of the nil amount for monies paid in cash stating it was prepared by the lawyer. The affidavit also alleges that the Appellant did not have an interest in the property. It states: "Michael Lewis Mutambirwa is beneficial owner of this whole property though Teresita Alcayaga has been named as part owner." The affidavit is false and he knew it.

[9]            The Appellant's testimony was in conflict with an application to Immigration concerning the relationship to the man she married.

[10]          Whether the marriage that took place on May 25, 1994 was a marriage of convenience for the husband is immaterial. Extra-marital relationships are common, particularly when many miles of land and ocean separate the spouses.

[11]          I find as a fact that the Appellant and Michael separated when the Appellant went back to the Philippines on May 4, 1997 and that when she returned to Canada in early September 1997, she continued to reside separate and apart from Michael at a different location.

[12]          For these reasons, the appeal from the 1996 assessment is dismissed and the appeal from 1997 and 1998 assessments are allowed, without costs, and the assessments are referred back to the Minister for reconsideration and reassessment on the basis that the Appellant separated from Michael on May 4, 1997 and from thereon lived separate and apart from him for the balance of the 1997 and the entire 1998 taxation year.

Signed at Ottawa, Canada, this 3rd day of July, 2001.

"Gordon Teskey"

J.T.C.C.

COURT FILE NO.:                                                 2000-3565(IT)I

STYLE OF CAUSE:                                               Teresita Alcayaga and The Queen

PLACE OF HEARING:                                         Toronto, Ontario

DATE OF HEARING:                                           June 18, 2001

REASONS FOR JUDGMENT BY:      The Honorable Judge Gordon Teskey

DATE OF JUDGMENT:                                       July 3, 2001

APPEARANCES:

For the Appellant:                                                 The Appellant herself

Counsel for the Respondent:              Brent Cuddy

COUNSEL OF RECORD:

For the Appellant:                

Name:                     

Firm:                       

For the Respondent:                             Morris Rosenberg

                                                                                Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

2000-3565(IT)I

BETWEEN:

TERESITA ALCAYAGA,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeals heard on June 18, 2001 at Toronto, Ontario by

the Honourable Judge Gordon Teskey

Appearances

For the Appellant:                                         The Appellant herself

Counsel for the Respondent:                         Brent Cuddy

JUDGMENT

          The appeal from the assessment made under the Income Tax Act (the "Act") for the 1996 taxation year is dismissed;

          The appeal from 1997 and 1998 assessments made under the Act are allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant separated from Michael Mutambirwa, on May 4, 1997 and from thereon lived separate and apart from him for the balance of 1997 and the whole of 1998, in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada on the 3rd day of July, 2001.

"Gordon Teskey"

J.T.C.C.