Villanueva v. R., [1998] 3 CTC 2056

Lamarre Proulx T.C.J.:

The appellant is appealing from the determination by the Minister of National Revenue (the “Minister”), the notice of which is dated December 20, 1995, and the purpose of which is to rule that the appellant was not an eligible individual for the purposes of the child tax benefit within the meaning of section 122.6 to 122.64 of the Income Tax Act (the “Act”) in respect of her adopted child during the months of August and September 1995.

In making this determination, the Minister considered the facts described in paragraph 4 of the Reply to the Notice of Appeal (the “Reply”) which are as follows:

[TRANSLATION]

(a) the appellant was divorced during the 1994 taxation year;

(b) the child for whom the appellant received a child tax benefit for the months of August and September 1995 is named Carlos;

(c) the Minister adjusted the child tax benefit to which the appellant was entitled to nil ($0) for the months of August and September 1995;

(d) the appellant therefore received an overpayment of $162 for the months of August and September 1995 based on the following calculation:

Amount of benefit already	$162
granted
Revised amount of benefit for
months of August and September	0
1995
Overpayment	$162

(e) from the Department of Human Resources Development, the Minister obtained the information, which the appellant confirmed by telephone, that her child Carlos had left Canada in July 1995 to return to live in Colombia;

(f) consequently, it was established by the Department of Human Resources Development that the appellant no longer met the definition of “eligible individual’’ under section 122.6 for the months of August and September 1995.

The reasons given in the notice of appeal are as follows:

(A) the assessment is not valid because my son always was and still is my dependant; I therefore believe I am entitled to the benefits that were denied me;

(B) I am the only person responsible for my son’s expenses, i.e. for clothing, food, school supplies, tuition, recreation, pocket money, etc.

The evidence revealed facts consistent with those described in the reasons of the notice of appeal. With respect to the facts described in the Reply, the appellant admitted subparagraphs 4(a) to 4(c) of the Reply.

As to subparagraph 4(a) of the Reply, she said that Carlos had left Canada in July 1994. The appellant explained that Carlos is her adopted son. He is the biological son of her brother and his spouse who live in Colombia. As the grandmother and her daughters thought that Carlos’s parents were not taking good care of him, they asked his father to entrust the child to them. The grandmother and the appellant live in Canada. It was the appellant who adopted Carlos. He arrived in Canada in 1990 and was 8 years at the time since he was born on August 8, 1982. Things went relatively well at first, but deteriorated in 1993 to the point where the appellant had to request the assistance of social services. An agreement on voluntary measures under the Youth Protection Act (Exhibit A-3) was signed by the adoptive mother, that is the appellant, and the Centre de services sociaux du Montréal Métropolitain [Metropolitan Montréal Social Services Centre -Tr.] to place Carlos in a reception centre. Carlos’s deportment and school marks did not improve and, upon consultation, the family decided to entrust Carlos to the appellant’s sister, Soledad, who was living in the family home in Medellin, Colombia.

The appellant was satisfied with this decision. As evidence of Carlos’s success and recovery, she filed his school report card for 1995 (Exhibit 1-1). She said he was doing equally well in 1996.

As Exhibit A-2, the appellant filed a letter from her sister Soledad explaining that both Soledad and the appellant are responsible for Carlos’s education, Soledad because she lives with him and takes care of him and the appellant because she provides general financial support. She also said that the appellant is still in communication with her to ensure her son’s welfare. The appellant filed as Exhibit A-l certain bank drafts in U.S. currency made out to Soledad for her son’s support. It is impossible to read the amounts on the copies and the evidence did not clearly show the amounts paid by the appellant each year. I believe it was an amount of more than US$500 per year.

The appellant argued that this decision to send Carlos to Medellin, Colombia, was made out of a concern for the child’s welfare and she continued to pay for the child’s support. However, it is not on the basis of the appellant’s common sense decision respecting her adopted son’s education that the Court must decide this appeal, but on the basis of the conditions relating to the status of “eligible individual” under the Act.

The definition of “eligible individual” in section 122.6 of the Act is as follows:

“eligible individual” in respect of a qualified dependant at any time means a person who at that time

(a) resides with the qualified dependant,

(b) is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of the qualified dependant,

(c) is resident in Canada,

(d) is not described in paragraph 149(1)(a) or (b), and

(e) is, or whose cohabiting spouse is, a Canadian citizen or a person who

(i) is a permanent resident (within the meaning assigned by the Immigration Act),

(ii) is a visitor in Canada or the holder of a permit in Canada (within the meanings assigned by the Immigration Act) who was resident in Canada throughout the 18 month period preceding that time, or

(iii) was determined before that time by the Convention Refugee Determination Division of the Immigration and Refugee Board to be a Convention refugee,

and for the purposes of this definition,

(f) where the qualified dependant resides with the dependant’s female parent, the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent,

(g) the presumption referred to in paragraph (f) does not apply in circumstances set out in regulations made by the Governor in Council on the recommendation of the Minister of Human Resources Development, and

(h) factors to be considered in determining what constitutes care and upbringing may be set out in regulations made by the Governor in Council on the recommendations of the Minister of Human Resources Development.

Paragraph (a) of this definition requires that the parent who fulfils the responsibility for the child’s care and upbringing reside with the child. For the purposes of paragraph (b) of the definition, subsections 252(1) and (2) of the Act provide that a person who has, in fact or in law, complete custody and control of a person who has not yet attained the age of 19 years may also be considered as a parent. In the instant case, the determination by the Minister of Human Resources Development is based on paragraph («) of the definition of “eligible individual”, that is to say on the ground that the appellant was not really residing with the child (letter dated February 1, 1995, Exhibit A-4).

What is the meaning of the words “resides with” in paragraph (a) of the definition of “eligible individual”?

Paragraph (c) of this definition requires that the “eligible individual” be resident in Canada. I believe that, in this instance, these words have the same meaning as those used in section 2 of the Act and that it is not necessary to reside in Canada physically as long as there are elements of attachment to Canada as developed by case law as a result of which a person is subject to Canadian income tax.

Paragraph (a) contains no mention of attachment to Canada, but of an attachment between two individuals as to the place of residence in that the residence must be common. I would say that the evidence shows beyond the shadow of a doubt that the child Carlos no longer has any residential ties with his adoptive mother. His place of residence is now the home of his aunt; it is there that he lives permanently and has all his belongings, where he goes to school and where he has his friends and family. There was no evidence that he came to spend his vacation with his adoptive mother. Instead, the mother said that she occasionally went to Colombia to visit Carlos and her sister Soledad.

The expression “resides with” was considered by Judge Rip of this Court in Eliacin c. R. (sub nom. Eliacin v. Canada), [1993] 2 C.T.C. 2635 (T.C.C.), which I cite at page 2638:

The word “with”, when used in the phrase “... the .... spouse ... resided with the taxpayer...” in paragraph 63(3)(d) means two things: first, the spouse must reside customarily in the same building as the appellant, and, second, there must be a domestic relationship between the two spouses and their children.

Parliament has set certain conditions for entitlement to the child tax credit, one of which is that the individual and the dependant have a common residence.

I therefore find that the Minister’s determination is correct in fact and in law because the appellant was not residing with her adopted son Carlos in August and September 1995.

The appeal is accordingly dismissed.

Appeal dismissed.