Date: 20010622
Docket: 2000-4283-IT-I
BETWEEN:
CHERYL ANDREA GRANT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hamlyn J.T.C.C.
[1]
These are appeals from assessments made under the Income Tax
Act (the "Act") in respect of the 1998 and
1999 taxation years.
[2]
In computing income for the 1998 and 1999 taxation years, the
Appellant did not include the amount of $4,200.00 for each
taxation year (the "amounts") received as alimony or
other allowances receivable on a periodic basis for child
support.
[3]
The Minister of National Revenue (the "Minister")
assessed the Appellant for the 1998 and 1999 taxation years, as
filed, by Notices of Assessment dated March 11, 1999 and
March 13, 2000, respectively.
[4]
In reassessing the Appellant for the 1998 and 1999 taxation years
by Notices of Reassessment dated May 26, 2000, the Minister
included the amounts in income.
FACTS
[5]
The Appellant and her ex-spouse, Brian Slocum, signed a
separation agreement prior to May 1997. In accordance with the
terms of the Support Deduction Order of the Ontario Court
(General Division) dated May 16, 1994, the Appellant's former
spouse was required to pay the Appellant monthly child support in
the amount of $350.00 per month beginning May 16, 1994. The
Appellant's former spouse paid the amounts to the Appellant
in the 1998 and 1999 taxation years in accordance with the
Separation Agreement.
JURISPRUDENCE
[6]
The Minister simply relies on paragraph 56(1)(b) of the
Act and states that the amounts are to be included in
income. It reads:
(b)
the total of all amounts each of which is an amount determined by
the formula
A - (B + C)
where
A
is the total of all amounts each of which is a support amount
received after 1996 and before the end of the year by the
taxpayer from a particular person where the taxpayer and the
particular person were living separate and apart at the time the
amount was received,
B
is the total of all amounts each of which is a child support
amount that became receivable by the taxpayer from the
particular person under an agreement or order on or after its
commencement day and before the end of the year in respect of a
period that began on or after its commencement day, and
C
is the total of all amounts each of which is a support amount
received after 1996 by the taxpayer from the particular person
and included in the taxpayer's income for a preceding
taxation year; [emphasis added]
[7]
Since 1997 the new rules provide that child support payments are
no longer taxable or deductible if they are made pursuant to
orders or written agreements made after April 30, 1997. Provision
is also made for the application of the new rules to orders or
written agreements made before April 30, 1997 if they are varied,
amended or a joint election is filed after the said date. The
relevant provision in this appeal is subsection 56.1(4) and the
definitions found therein for the terms "child support
amount", "commencement day" and "support
amount". They read:
56.1(4) The definitions in this subsection apply in this
section and section 56.
...
"child support amount" means any support amount that
is not identified in the agreement or order under which it is
receivable as being solely for the support of a recipient who is
a spouse or former spouse of the payer or who is a parent of a
child of whom the payer is a natural parent.
...
"commencement day" at any time of an agreement or
order means
(a)
where the agreement or order is made after April 1997, the day it
is made; and
(b)
where the agreement or order is made before May 1997, the day, if
any, that is after April 1997 and is the earliest of
(i)
the day specified as the commencement day of the agreement or
order by the payer and recipient under the agreement or order in
a joint election filed with the Minister in prescribed form and
manner,
(ii)
where the agreement or order is varied after April 1997 to change
the child support amounts payable to the recipient, the day on
which the first payment of the varied amount is required to be
made,
(iii)
where a subsequent agreement or other is made after April 1997,
the effect of which is to change the total child support amounts
payable to the recipient by the payer, the commencement day of
the first such subsequent agreement or order, and
(iv) the
day specified in the agreement or order, or any variation
thereof, as the commencement day of the agreement or order for
the purposes of this Act.
"support amount" means an amount payable or
receivable as an allowance on a periodic basis for the
maintenance of the recipient, children of the recipient or both
the recipient and children of the recipient, if the recipient has
discretion as to the use of the amount, and
(a)
the recipient is the spouse or former spouse of the payer, the
recipient and payer are living separate and apart because of the
breakdown of their marriage and the amount is receivable under an
order of a competent tribunal or under a written agreement;
or
(b)
the payer is a natural parent of a child of the recipient and the
amount is receivable under an order made by a competent tribunal
in accordance with the laws of a province.
[8]
Paragraph 56(1)(b) of the Act provides the formula
for the inclusion of support in the recipient's income. For
these purposes, 'A' and 'B' are relevant.
'A' provides that a support amount will be included to
the extent that it meets the definition of "support
amount" found in subsection 56.1(4). 'B'
essentially provides for the exclusion of amounts received as
child support after its commencement day. In other words, if a
commencement day exists the child support amount is not included
in income under paragraph 56(1)(b).
[9]
The definition of "commencement day" is the result on
the occurrence of specific actions. The relevant situation is
found in paragraph (b) of that definition which provides
that where the agreement or order is made before May 1997, (which
is the case in the present appeal since it is dated May 16,
1994), a commencement day will come into effect on the day
specified in the joint election filed with the Minister in
prescribed form and manner.
SIGNIFICANT EVIDENCE
[10] The
Appellant stated that in 1998 she and her ex-spouse discussed the
Election for Child Support Payments under the new Income Tax
Act legislation applicable after April 1997. She stated that
the ex-spouse signed the election, being Form T1157. The original
form was filed as Exhibit R-10. (A copy was filed as Exhibit
A-2.) Exhibit R-10 indicates the document execution day was
"98-10-01" and the document was received by
the Tax Centre, Ottawa on "98-10-13". She
also said the Appellant signed it saying the deduction was of no
consequence to him.
[11] In an
affidavit filed with the Notice of Appeal, the Appellant states
that her son witnessed the ex-spouse's signature.
[12] The
Appellant's viva voce evidence was that Exhibit R-10
was signed by the ex-spouse sometime before Christmas, in
November or December 1998. On this occasion the ex-spouse was
helping the son with the raising of the Christmas tree at the
Appellant's home. The Appellant's son said he did not
witness the Appellant or the ex-spouse signing the document but
he does recall the raising of the Christmas tree. The ex-spouse
recalls the Christmas tree raising in November or December of
1998 and stated he may have signed only a passport application
for the son (Exhibit A-4).
[13] The
ex-spouse vehemently denies that he signed the T1157 and
specifically said his signature did not appear on the document
(Exhibit R-10) and further, at no time did he elect that the
child support payments not be deductible.
ANALYSIS
ASSESSMENT OF THE EVIDENCE
[14] The onus
is on the Appellant to bring sufficient evidence to show the
assessment is incorrect.
[15] She
stated the ex-spouse signed the T1157 and she then reviewed
several years of an acrimonious relationship between the
ex-spouse and herself where she alleged the ex-spouse's
behaviour in relation to custody, support and divorce matters
should, in her view, lead to a conclusion that the
ex-spouse's evidence was less than credible.
[16] The
ex-spouse's evidence was clear that he did not sign the
document, that on the date he was alleged to have signed the
document he was not at the Appellant's home, and he could by
his normal pattern of behaviour, account for his presence being
elsewhere.
[17] Whether
the occasion of the raising of the Christmas tree was the time of
the purported signing, October 1, 1998, is not clear.
Indeed, from the evidence I conclude the T1157 was not signed by
anyone at the time of the Christmas tree raising as the document
was received by the C.C.R.A. well before the Christmas
season.
[18] The
Appellant also admitted she altered the T1157 at least to the
degree of printing in the name of the ex-spouse on the face of
the document well after the alleged signing. The Appellant's
recollection of other matters with respect to details or dates
was imprecise. The allegations of trickery, deceit and forgery
have created an atmosphere of acrimony, clouding all the
evidence.
[19] On a
balance of probabilities there is no conclusive evidence for the
Court to conclude that the election for child support payments
Form T1157 (Exhibit R-10) can be relied upon. The
Appellant has not discharged the onus of proof to show the
assessment was wrong.
[20] The
Appellant, also in evidence, related her difficulties in dealing
with the C.C.R.A. and how she alleges they mishandled her file.
She states that the C.C.R.A. eventually informed her that they
did not believe that the signature on the form was the
ex-spouse's and that it had been forged. She was told that
her ex-spouse had denied signing the said form. The C.C.R.A. then
refused to comment on the nature of the document that the
ex-spouse had submitted to be analyzed for comparison purposes by
an expert. The Appellant then submitted copies of legal documents
with her ex-spouse's signature (i.e. affidavit of land
transfer, loan agreement). She contends that the Minister refused
to consider the documents she submitted and she was informed that
a formal appeal was required.
CHARTER ISSUES, NATURAL JUSTICE
AND MINISTERIAL DISCRETION
[21] The
Appellant states that her rights under paragraphs 11(a) and (d)
of the Canadian Charter of Rights and Freedoms have been
infringed. Firstly, under paragraph 11(a), she states that the
Minister failed to disclose the bona fide reason for the
reassessment for approximately five months. Secondly, under
paragraph 11(d), she states that the Minister arbitrarily imposed
a financial penalty despite the existence of a formal objection
and further potential for appeal.
[22]
Specifically, these purported abuses seem to relate to the
Minister and the exercise of his discretion.
[23] The
rights guaranteed by section 11 of the Charter are
available to persons prosecuted by the state for public offences
involving punitive sanctions (i.e. criminal, quasi-criminal and
regulatory offences. This Court has determined that
section 11 does not apply to assessments made under the
Income Tax Act. In Rahey v. Canada, 90 DTC 1053,
Bonner J. of this Court found that section 11 of the
Charter does not apply to income tax cases because tax
assessments and penalties were not offences within the meaning of
section 11. As A.C.J. Christie stated in Budyk v. The
Queen, [1996] 3 C.T.C. 2328:
Neither the Minister's reassessment of the appellant's
liability to tax respecting 1992 and 1993 nor the administrative
matters related thereto involved the appellant being charged with
an offence. The same is true of the proceedings before this
Court.
In relation to the suggestion the Appellant was denied natural
justice in the assessment process through the objection stage,
the assessment process is an administrative process in a civil
context. The Appellant's right to natural justice[1] is preserved in the
process of her appeal to this Court. The Tax Court of Canada is
an independent tribunal that has no vested interest in either
party and hears equally from all sides in terms of evidence and
submissions.
[24] As to any
request to have this Court review the discretionary power of the
Minister in the process of the assessment, the forum for such a
review is not the Tax Court of Canada.[2]
DECISION
[25] The
appeals are dismissed.
Signed at Ottawa, Canada, this 22nd day of June 2001.
"D. Hamlyn"
J.T.C.C.
COURT FILE
NO.:
2000-4283(IT)I
STYLE OF
CAUSE:
Cheryl Andrea Grant and
Her Majesty the Queen
PLACE OF
HEARING:
Toronto, Ontario
DATE OF
HEARING:
June 13, 2001
REASONS FOR JUDGMENT BY: The
Honourable Judge D. Hamlyn
DATE OF
JUDGMENT:
June 22, 2001
APPEARANCES:
For the
Appellant:
The Appellant herself
Counsel for the
Respondent:
Sointula Kirkpatrick
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-4283(IT)I
BETWEEN:
CHERYL ANDREA GRANT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on June 13, 2001 at Toronto,
Ontario, by
the Honourable Judge D. Hamlyn
Appearances
For the
Appellant:
The Appellant herself
Counsel for the Respondent: Sointula
Kirkpatrick
JUDGMENT
The
appeals from the assessments made under the Income Tax Act
for the 1998 and 1999 taxation years are dismissed in accordance
with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 22nd day of June 2001.
J.T.C.C.
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