Date: 20000107

Dockets: 98-1736-IT-I; 98-3866-IT-I

BETWEEN:

ANNE SHARPE & FLOYD ROSS,

Appellants,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

HIS HONOUR: The operative word here is where more than one individual is, in respect of a taxation year, entitled to deduct an amount. On the evidence before me, I don’t see how the other person here would be entitled to deduct an amount.

MS. PETERSMYER: I think that is an absolutely fair finding, Your Honour. Revenue Canada endeavours, when the get these, to give the broadest interpretation to 118(1)(b). They have the jurisprudence. It says, “at any time in the year the person has to maintain a domestic establishment...” which they did, “...and during that time has to support the person, which on the facts given to Revenue Canada is what happened for both of these individuals in this case.

But given the evidence from Mr. Ross this morning and given Ms. Sharpe’s non or failure to appear, I think that is absolutely a fair finding.

HIS HONOUR: The Appellant, Floyd Ross, appealed with respect to his 1996 taxation year. In computing his income for that year, he claimed a deduction for an equivalent-to-spouse amount of $5380. However, the Appellant’s former spouse, Anne Sharpe, also claimed the equivalent-to-spouse amount for that particular taxation year.

As a consequence, the Minister took the position with both parties, relying on the provision of the Act to the effect that where the parties are unable to agree as to the entitlement to the claim, neither individual is granted the particular amount.

The matter was earlier set for hearing and at that particular point in time the matter came before the court in Victoria - Judge Teskey - on April 30, 1999 and the circumstances were explained to both Appellants, Floyd Ross and Anne Sharpe. As a consequence, the matter was adjourned and it was set for a future date, which was today and also the place of hearing was changed to Nanaimo and both the Appellants were notified.

Mr. Ross appeared here today and Anne Sharpe did not.

The evidence is that Mr. Ross had custody of his daughter since 1990, at which time his daughter was nine years old and that he had been a single parent ever since, looking after his daughter. He incurred health problems in the spring of 1996 and later on between, September 20 and December 16^th, his daughter stayed at his ex-wife’s house. The Appellant, Floyd Ross, and his daughter were able to go on holidays together in December, returning in January.

The health problems continued and his daughter also remained staying at nights at Anne Sharpe’s house in 1997, however, throughout, his daughter came to his house at least three times a week.

Anne Sharpe did not claim the equivalent-to-spouse amount in 1997. Anne Sharpe - in 1997 - was threatening to sue for custody and child support but did not pursue that avenue. And, on October 1^st of 1997 Mr. Ross paid her $2000 which reimbursed her for all of the expenses that she had incurred starting in 1996 until August of 1997, even so far as to pay her for birthday presents and paying for the learner's permit for the child's driver’s license.

Now, in order for the conflict to set up a position where - failing agreement - neither party will get the amount, there must be an entitlement by both individuals. In this particular instance, I cannot see within the framework of 118(4)(b) how it can be said that in the 1996 taxation year Anne Sharpe was entitled to such a deduction. Any support that was granted was in a very small amount and the main and overwhelming support was provided by Mr. Ross. In any event, there was complete and total reimbursement subsequent for that particular period of time in 1996.

In my view, there was no entitlement by Anne Sharpe. As a consequence, it is not a situation of there being more than one person entitled to the deduction under subsection 118(1). The only person properly entitled under the Act in that taxation year was Mr. Ross.

Accordingly, the appeal of Mr. Ross is allowed with costs and the assessment is referred back to the Minister on the basis the Appellant is entitled to the equivalent-to-spouse amount as claimed.

As for the appeal of Anne Sharpe. She was properly notified of the time, date and place of her appeal and she failed to appear. Accordingly, her appeal is dismissed.

Signed at Sidney, British Columbia, this 7th day of January 2000.

"D.W. Rowe"

D.J.T.C.C

CERTIFIED CORRECT;

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ALANA SKUCE    COURT REPORTER