Armstrong v. R., [1999] 4 CTC 2719 (Informal Procedure)

Bowman T.C.J.:

This appeal is from a Child Tax Benefit Notice in which the Minister of National Revenue determined that the appellant was not entitled to the child tax benefit for the period July to September 1996 on the basis that she was, in the months of July and August, 1996, not an “eligible individual” within the meaning of section 122.6 of the Income Tax Act in respect of her three infant children, Paul, Michael and Luke Hey in that she was not during those months the person who primarily fulfilled the responsibility for the care and upbringing of those children.

The appellant separated from her husband Simon Hey in May 1991 and moved to Vancouver in August 1991. A lengthy custody battle ensued.

Under a domestic agreement of May 12, 1991 the appellant and her husband were to have joint custody of the children “with the children continuing to have their prime residence with the wife”.

On July 14, 1993 the spouses signed an amendment to the domestic agreement which read in part as follows:

(a) The Husband and Wife shall have joint custody of the children of the marriage, with the primary residency of the children to be with the Husband. The Wife shall have liberal and reasonable access to the children of the marriage, at all reasonable times and with reasonable notice by the Wife to the Husband.

The appellant’s lawyer, Mr. Rooneem, signed a Certificate of Independent Legal Advice with respect to this transaction. The certificate was false. No independent legal advice was given to the appellant and she did not understand the nature and effect of what she was signing. The lawyer was disciplined by the Law Society.

On November 22, 1994, Mr. Justice Gallant awarded custody of the children to the father based on the fact that “she signed an amendment agreement in July 1993 where she confirmed his right to the care and con- trol of the three children, and that again shows a lack of commitment on her part”.

He refused to reject the Certificate of Independent Legal Advice which was subsequently proved to be false. My observation of the appellant is that she has shown throughout extreme commitment to her children, of whom she now has full custody.

Accordingly, I do not think that the award of custody to the father in November of 1994 can be taken as determinative.

In July and August of 1996, the children resided with the appellant. I find as a fact that during those two months she had the primary responsibility for the care and upbringing of the children.

In À. v. Marshall, [1996] 2 C.T.C. 92 (Fed. C.A.) Stone J.A. of the Federal Court of Appeal said at page 94:

This section of the Act contemplates only one parent being an “eligible individual” for the purpose of allowing the benefits. It makes no provision for prorating between two who claim to be eligible parents. Only Parliament can provide for a prorating of benefits but it has not done so.

This was followed by Lamarre Proulx J. in Bouchard c. R. (1997), [1998] 1 C.T.C. 3071 (T.C.C.) and by me in Pollak v. R., 98-4444(IT)I, January 22, 1999. [reported [1999] 2 C.T.C. 2225 (T.C.C.)]. Lamarre Proulx J. held that the eligibility of the parent claiming the benefit was to be determined “à un moment donné” (at any time). This implies that although the benefit cannot be prorated between two parents, a determination must be made at a particular time, and not on a yearly basis. Where a parent fulfils the criteria set out in section 6302 of the Regulations during a significant period of time — in this case two months — that parent is in that period an “eligible individual” for the purposes of the child tax benefit during that period. Such a determination on a monthly basis appears to be contemplated by sections 122.61 and 122.62. I am of course not talking about casual visits for a few days.

Counsel argued that “resides with” in paragraphs (a) and (f) of the definition of “eligible individual” means “is ordinarily resident”, an expression used elsewhere in the Income Tax Act for the purposes of determining residence for tax purposes. The concept was discussed at length in Thomson v. Minister of National Revenue (1945), [1946] S.C.R. 209 (S.C.C.) and in Fisher v. R. (1994), 95 D.T.C. 840 (T.C.C.).

“Resides” and “is ordinarily resident” are two different expressions, used for different purposes and if Parliament uses different words it is pre- sumed that it intends them to be given different meanings (Glaxo Wellcome Inc. v. R. (1996), 96 D.T.C. 1159 (T.C.C.), aff’d (1998), 98 D.T.C. 6638 (Fed. C.A.).

I might observe in passing that the presumption in paragraph (f) of the definition probably does not apply in light of paragraph 6301(1)(d) of the Regulations.

I find however, quite independently of paragraph (f), that in July and August of 1996 the three children resided with the appellant within the meaning of paragraph (a) of the definition and that in that period of time she was the parent who primarily fulfilled the responsibility for their care and upbringing.

The appeal is therefore allowed and the determination is referred back to the Minister of National Revenue for redetermination on the basis that the appellant was an eligible individual within the meaning of section 122.6 of the Income Tax Act in July and August 1996 in respect of the three children Michael, Luke and Paul for the purposes of the Child Tax Benefit.

Appeal allowed.