Dixon v. The Queen, docket 97-1019-IT-I (Informal Procedure)

Date: 19990108

Docket: 97-1019-IT-I

BETWEEN:

JOHN ANTHONY DIXON,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on December 3, 1998 at Calgary, Alberta, by the Honourable Judge R.D. Bell

Reasons for judgment

Bell, J.T.C.C.

ISSUE:

[1] The issue is whether the Appellant is entitled, under section 62 of the Income Tax Act ("Act") to deduct moving expenses incurred in moving from Texas to Alberta in his 1994 taxation year.

[2] The Appellant testified that in 1990 he went to Austin, Texas where he worked in physics, being a theoretical physicist doing elementary particle research. He and his wife and children moved to Montreal in the summer of that year for the birth of their twin boys. He returned to Texas in 1991 to a position as visiting assistant professor in theoretical physics. He said that he was paid for eight months a year only and made frequent returns to Canada.

[3] He and his wife purchased a house in Texas where he spent three years teaching, namely, 1991/1992, 1992/1993 and 1993/1994.

[4] He gave evidence about his wife owning a house in Victoria, the maintaining of a bank account in Montreal, inactive membership in the Law Society of Alberta, holding a least one credit card from a Canadian institution, having a life insurance policy with a Canadian company, having a registered retirement savings plan with a Canadian trust company and being a director of a private family corporation.

[5] He decided to return to Canada and began practising law in Calgary. He testified that he had filed Canadian income tax returns for the 1991 and 1992 taxation years during which time he was in the United States. He said that in 1993 and 1994 he did not file income tax returns in Canada mostly because he wasn't earning enough income to be taxable.

[6] The Appellant and his family moved from Texas to Calgary in June, 1994 at which point he wrote Bar examinations and commenced practising law with his brother. He stated that he had not filed a 1994 tax return because of losses suffered in that year.

SUBMISSIONS AND ANALYSIS AND CONCLUSION:

[7] In order to succeed in his appeal, the Appellant, as a first step, must demonstrate that he was resident in Canada in 1994. Specifically, he must fall within the criteria contained in section 64.1 of the Act. The pertinent portion of that reads as follows:

In applying sections 62, 63 and 64 in respect of a taxpayer who is, throughout all or part of a taxation year, absent from but resident in Canada ...

[8] If he qualified within the above description, he must then succeed in the argument under subsection 62(1) with respect to how that section providing for the deductibility of moving expenses should be read.

[9] I have concluded that the Appellant fails so to qualify.

[10] He submitted that, for purposes of section 64.1, he by virtue of subsection 250(1) of the Act was resident in but absent from Canada for part of the 1994 taxation year and that, accordingly, subsection 62(1) should be read in a certain fashion. The pertinent portion of Subsection 250(1)(a) reads as follows:

For the purposes of this Act, a person shall, ... be deemed to have been resident in Canada throughout a taxation year if the person

(a) sojourned in Canada in the year for a period of, or periods the total of which is, 183 days or more;

[11] The Appellant's submission continued with his assertion that he had sojourned in Canada during the post-June move to Canada and accordingly was resident in the country but absent during a portion of the year, namely, the period prior to the move to Calgary. He referred to the post-move period and said that he had "sojourned in Canada" during same, that constituting more than 183 days. He referred to the French version of the Act and said that the words a séjourné would literally be translated to mean "to live for a time in a place" which is different from the meaning of the word sojourned which has a much more temporary character. Such an interpretation of sojourned would compromise the meaning of the words "reside" and "residence". In Thomson v. M.N.R., 2 DTC 812, Estey, J., at 813 said:

A reference to the dictionary and judicial comments upon the meaning of these terms indicates that one is "ordinarily resident" in the place where in the settled routine of his life he regularly, normally or customarily lives. One "sojourns" at a place where he usually, casually, or intermittently visits or stays. In the former the element of permanence; in the latter that of the temporary predominates. The difference cannot be stated in precise and definite terms, but each case must be determined after all of the relevant factors are taken into consideration, but the foregoing indicates in a general way the essential difference. It is not the length of the visit or stay that determines the question.

[12] Also, the Federal Court of Appeal in Qing Gang K. Li v. Her Majesty the Queen, 94 DTC 6059 in discussing the words qui séjourné which appeared in the China-Canada Income Tax Agreement, 1986, said:

It is my view that Article 19 has as its purpose the avoidance of double taxation of Canadian and Chinese nationals who are in receipt of income while temporarily in the state of which he or she is not a national. This much is clear from the recitals in the Agreement and from reading the text of the Agreement as a whole. Although the English version of Article 19 is arguably ambiguous, the use of the phrase qui séjourné in the French version, which is equally authoritative, puts it beyond doubt that the presence in Canada of which the Article speaks, as a prerequisite to its successful invocation, is a temporary one. ...

[13] I conclude that the Appellant did not, after moving to Canada from Texas in 1994 sojourn in Canada. He resided in Canada after that move. Accordingly, he cannot be said to have been resident in but absent from Canada during the first part of that year when he was living in Texas.

[14] Having come to this conclusion, it is not necessary to consider any subsequent arguments, the initial premise of the Appellant's submissions having faltered.

[15] The appeal is dismissed.

Signed at Ottawa, Canada this 8^th day of January, 1999.

"R.D. Bell"

J.T.C.C.