Milot v. R., [1996] 1 CTC 2247 (Informal Procedure)

Lamarre Proulx J.T.C.C.— The appellant instituted an appeal under the informal procedure from assessments by the Minister of National Revenue (“the Minister”) for the 1992 and 1993 taxation years.

At the hearing, counsel for the respondent made it known to the Court that the respondent did not object to the appellant’s appeal for 1992. Consequently, the appeal is allowed, without costs, for that year.

The point at issue is whether, in 1993, a person of the male sex cohabited with the appellant in a conjugal relationship within the meaning of subsection 252(4) of the Income Tax Act, R.S.C. 1985 (5th Supp), c. 1 (“the Act”) for the purposes of the equivalent-to-married credit provided at paragraph 118(1 )(b) of the Act, the goods and services tax credit provided at section 122.5 of the Act and the child tax benefit provided at section 122.6 of the Act.

The facts on which the Minister relied in order to make his assessment are described at paragraph 9 of the reply to the notice of appeal (“the reply”) and are as follows:

(a) during the 1992 and 1993 taxation years, the appellant and Serge Duval both lived at 583-A Laurendeau in Repentigny;

(b) the rental lease of 583-A Laurendeau in Repentigny for the period from July 1, 1992 to June 30, 1994 was made in the name of the lessees Serge Duval and Sylvie Milot;

(c) Serge Duval is the father of the appellant’s second child, Audrey, born on November 18, 1993;

(d) the names of Serge Duval and the appellant appear as the child’s father and mother on the certification of Audrey’s declaration of birth dated November 18, 1993, and it is mentioned that they were living as a couple;

(e) Serge Duval and the appellant had a joint term deposit and a joint bank account during the period in issue;

(f) family allowances of $268 were received by the appellant during the 1992 taxation year;

(g) in her income tax returns for the 1992 and 1993 taxation years, the appellant did not mention that she was living with Serge Duval as a couple;

(h) when the appellant filed her income tax returns for the 1992 and 1993 taxation years, she claimed an equivalent-to-married credit of $914.60 ($5,380 x 17 per cent) in computing the total of her non-refundable tax credits;

(j) when the appellant filed her income tax return for the 1993 taxation year, she claimed the goods and services tax credit as well as the child tax benefit.

[Translation.]

The appellant testified on her behalf. Lisette Roy, an appeals officer with the Department of National Revenue, testified for the respondent. A subpoena (Exhibit I-6) had been served on Serge Duval on March 24, 1995 at 7:05 p.m. by depositing it in the mail box. Mr. Duval was not present at the hearing and the parties did not request an adjournment.

The appellant admitted paragraphs (c) to (h) and (j) of the reply. She denied paragraph (a) of the reply. She said that Mr. Duval had lived at times at her home and at times at his parents’ home, the address of which was 22, rue Meloche in St-Constant. In 1993, Mr. Duval was 31 years of age and no document from him bears that address. For example, his return of income bore the address mentioned at paragraph (a) of the reply. Lisette Roy explained that she had asked Mr. Duval for documents identifying him and bearing an address other than the one mentioned at paragraph (a) of the reply. He was not able to provide any to her, nor was the appellant.

The appellant also denied the allegations made at paragraph (b) of the reply. She said that if Mr. Duval’s signature always appeared for 1993, that was merely for guarantee purposes, not as a lessee. She explained that she had lived alone with her first daughter prior to 1992. She then met Mr. Duval, and they conceived the desire to live together. She contended that this was in fact only an illusory wish and that she and Mr. Duval had never lived together continuously.

As to the statement made in the declaration of birth mentioned at paragraph (d) of the reply and filed as Exhibit 1-1, she mentioned that it was Mr. Duval who had signed it and that that statement was without any basis in fact. She said, however, that she had been ill at the start of 1993 and required to remain in bed and that he had taken care of her daughter and her. She did not dispute that he was the father of her daughter born on November 18, 1993.

The explanations provided with respect to what is expressed at paragraph (e) of the reply were confused. The documents in question in that paragraph, which were a joint term deposit and a joint bank account, were not filed in order to prove the appellant’s statements that Mr. Duval had not put money in the joint account and that that account was virtually unused. She said she had opened that account in order to do Mr. Duval a favour. The appellant filed a list of accounts that she said she had paid directly through the bank, Exhibit A-1. This was a list that she had made herself. Mr. Duval’s return of income was not filed for 1993, but that for 1992 was filed as Exhibit I-5. It shows employment income of $29,852.

The statutory provisions providing the equivalent-to-married credit, the goods and services tax credit and the child tax benefit require that the spouse’s income be taken into account in order for them to apply. Reference must therefore be made to the definition of “spouse” at subsection 252(4) of the Act:

252(4) In this Act,

(a) words referring to a spouse at any time of a taxpayer include the person of the opposite sex who cohabits at that time with the taxpayer in a conjugal relationship and

(i) has so cohabited with the taxpayer throughout a 12-month period ending before that time, or

(ii) is a parent of a child of whom the taxpayer is a parent (otherwise

than because of the application of subparagraph (2)(a)(iii))

and, for the purposes of this paragraph, where at any time the taxpayer and the person cohabit in a conjugal relationship, they shall, at any particular time after that time, be deemed to be cohabiting in a conjugal relationship unless they were not cohabiting at the particular time for a period of at least 90 days that includes the particular time because of a breakdown of their conjugal relationship;

(b) references to marriage shall be read as if a conjugal relationship between 2 individuals who are, because of paragraph (a), spouses of each other were a marriage;

(c) provisions that apply to a person who is married apply to a person who is, because of paragraph (a), a spouse of a taxpayer; and

(d) provisions that apply to a person who is unmarried do not apply to a

person who is, because of paragraph (a), a spouse of a taxpayer.

This definition leads us to consider the notion of conjugal relationship. When can two persons be considered as living in a conjugal relationship? This notion has often been studied for the purposes of various statutes. In Quebec, for example, this notion was studied in particular for the application of the Automobile Insurance Act, R.S.Q., c. A-25, section 2, paragraph 2, and the Act respecting the Québec Pension Plan, R.S.Q., c. R-9, section

91. See Les personnes et les familles, Knoppers, Bernard et Shelton, Tome 2, Les éditions Adage, the first chapter of which is entitled “Les families de fait”. It states that cohabitation is fundamental in a conjugal relationship and in conjugal conduct. That conduct may be determined through sexual relations, emotional and intellectual exchange, financial support and common knowledge.

In their book, Introduction to Canadian Family Law, Carswell, 1994, the Ontario authors Payne and Payne refer to the judgment by Kurisko J. in Molodowich and Penttinen, 17 R.F.L. (3d) 376. I cite these authors at pages 38 and 39 because it seems to me they provide an excellent synthesis of the elements that must apply in order to determine whether two persons are living in a conjugal relationship:

Not all arrangements whereby a man and a woman live together and engage in sexual activity will suffice to trigger statutory support rights and obligations. As was observed by Morrison J.A., of the Nova Scotia Court of Appeal:

It think it would be fair to say that to establish a common law relationship there must be some sort of stable relationship which involves not only sexual activity but a commitment between the parties. It would normally necessitate living under the same roof with shared household duties and responsibilities as well as financial support.

More specific judicial guidance as to what constitutes cohabitation or a conjugal or marriage-like relationship is found in a judgment of the Ontario District Court, wherein Kurisko D.C.J. identified the following issues as relevant:

1. Shelter

(a) Did the parties live under the same roof?

(b) What were the sleeping arrangements?

(c) Did anyone else occupy or share the available accommodation?

2. Sexual and Personal Behaviour:

(a) Did the parties have sexual relations? If not, why not? (b) Did they maintain an attitude of fidelity to each other?

(c) What were their feelings toward each other?

(d) Did they communicate on a personal level?

(e) Did they eat their meals

(f) What, if anything, did they do to assist each other with problems or during illness?

(g) Did they buy gifts for each other on special occasions?

3. Services:

What was the conduct and habit of the parties in relation to:

(a) preparation of meals

(b) washing and mending clothes;

(c) shopping;

(d) household maintenance; and

(e) any other domestic services?

4. Social:

(a) Did they participate together or separately in neighbourhood and community activities?

(b) What was the relationship and conduct of each of them toward members of their respective families and how did such families behave towards the parties?

5. Societal:

What was the attitude and conduct of the community toward each of them and as a couple?

6. Support (economic):

(a) What were the financial arrangements between the parties regarding the provision of or contribution toward the necessaries of life (food, clothing, shelter, recreation, etc.)?

(b) What were the arrangements concerning the acquisition and ownership of property?

(c) Was there any special financial arrangement between them which

both agreed would be determinant of their overall relationship?

7. Children:

What was the attitude and conduct of the parties concerning the children?

As Kurisko D.C.J. further observed, the extent to which each of the aforementioned seven different components will be taken into account must vary with the circumstances of each particular case.

The appellant did not dispute the fact that Mr. Duval was the father of her second daughter born on November 18, 1993. She disputed the idea that he had cohabited with her in a conjugal relationship. She claimed that he had not lived with her and that he had not contributed to the household’s expenses.

The evidence did not show that there had not been cohabitation during 1993. The appellant’s statements alone cannot be sufficient when the documentary evidence is to the contrary. The appellant’s testimony was not corroborated by any testimonial or written evidence. On the contrary, the written and testimonial evidence invalidated her testimony. Furthermore, during that year, she was ill and required to stay in bed for a certain time; she went through a pregnancy and gave birth to a girl.

As to the financial support aspect, the real exhibits were not filed. The appellant claimed that she alone had paid all the household expenses. However, there was a joint bank account and a joint term deposit and Mr. Duval was a co-signer of the lease. Here again, the evidence did not support the appellant’s statements.

On a balance of probabilities, I am of the view that, during 1993, the appellant cohabited with Mr. Duval in a conjugal relationship and that the latter was her spouse within the meaning of subsection 252(4) of the Act. Thus, the calculation of the family income for the purposes of the statutory provisions cited above therefore had to take into account that spouse’s income.

The Minister’s assessment was correctly based in fact and in law and the appeal is therefore dismissed for 1993. As mentioned at the outset, the appeal for 1992 is allowed, without costs.

Appeal dismissed.