http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/144724/index.do
Margeau v. The Queen (June 2, 2016 – 2016 TCC 142, Smith J.).
Précis: The taxpayer claimed Canada Child Tax Benefits for both children of her former marriage. CRA denied most of the Benefits on the basis that the taxpayer and her ex-spouse were shared-custody parents during most of the period. In the end it boiled down to a question of credibility and the Tax Court preferred the evidence of the father, i.e., that the children were primarily in his custody during the period in question. The mother was held however to have had sole custody of one of the children during the month of July, 2014.
Decision: As with many cases involving the aftermath of the breakdown of a marriage, the facts here were complex:
[1] Angelic Mageau (the “Appellantʼʼ) appeals under the informal procedure from a notice of determination dated October 20, 2014 whereby the Minister of National Revenue (the “Minister”) determined that she was not the eligible individual for purposes of the Canada Child Tax Benefit (“CCTB”) in respect of her two children (A and C) for the 2012 base year (December 2013 to June 2014) and 2013 base year (July 2014 to November 2014).
[2] The Minister also issued a notice of determination dated March 20, 2015 for the 2013 base year (December 2014 to March 2015) as well as a further notice of determination dated May 20, 2015, again for the 2013 base year (April 2015 to June 2015).
[3] While it is admitted that the Appellant was the eligible individual in respect of her two children for purposes of the CCTB up to November 2013, the Minister claims that she was not the eligible individual for the ensuing twelve month period (December 2013 to November 2014) and that the father was the eligible individual during that period.
[4] The Minister has also taken the position that the Appellant was the eligible individual with respect to one child (C) from December 2014 to June 2015, that she was a shared-custody parent with respect to the other child (A) for the period from December 2014 to March 2015 and the eligible individual for A for the ensuing period ending June 2015.
[5] In order to establish the notices of determination, the Minister made the following assumptions:
a. That the Appellant and the father are the parents of A, born in 1999 and of C born in 2002;
b. That the Appellant and the father have been living separate and apart since 2005;
c. That starting on or about November 19, 2013;
i. A and C were living with their father on a full time basis;
ii. C attended school in the vicinity of the father’s residence;
iii. A took a school bus to attend school from his father’s residence;
iv. The residence of A and C, as registered with the schools they attended, was their father’s residence.
d. As of December 2014, the Appellant was living with C, on a full-time basis;
e. From December 2014 to February 2015, the Appellant shared custody of A, with the father, and both were living with A on an equal or near-equal basis;
f. As of March 2015, the Appellant was living with A on a full time basis.
The taxpayer contended that she had sole custody of both children at all material times. The evidence of the two parents was in conflict:
[35] Despite the apparent contradictions, there are consistencies in the testimony presented by the Appellant and the father. Notably, the Appellant does not dispute that she asked the father to continue to care for A and C upon her return from holidays, as she looked for an apartment. Both agree that the children returned to live with the Appellant once she had settled into an apartment in January 2014 but that there was conflict with C that led her to return to live with her father. The duration of that period is disputed.
[36] Also, the Appellant does not dispute that the children changed schools from Montpellier to Gatineau and that the bus stop for A and the school for C were located near the father’s residence located approximately 15 minutes from the Appellant’s apartment in Gatineau.
[37] The Appellant stated that she drove both children every morning and arranged to pick them up at the end of the day. She indicated that she used a neighbour’s vehicle but no evidence was adduced to corroborate this statement. While I have no difficulty believing that the Appellant did so on numerous occasions, I find it improbable and unlikely that she did so every school day during the whole time period in question.
[38] While it might seem that the father is simply trying to take advantage of the fact that he took steps to change the children’s school, providing the Court with the documentation collected during that process, I find that his position is more nuanced and therefore more credible. He acknowledges that the time spent by the children with either parent was by no means consistent but expressed the view that by and large the children resided about 75% of their time with him. The father also acknowledged that both children returned for a time to live with the Appellant in January 2014 and that C returned to live with the Appellant for the month of July 2014 and on a full time basis from December 2014.
[39] The Appellant’s testimony was much less nuanced. She was defensive and categorical, insisting that the father was lying. While she maintained that she absorbed most of the child-related expenses, she appeared to gloss over the events that transpired during the months in question. Although she admitted in cross-examination that there was some conflict with C that led to charges being laid against her, she simply glossed over that event. This suggests that she has been less than truthful and forthright in her version of the facts and that the Court is not getting the full picture.
[40] Even if I was tempted to give the Appellant the benefit of the doubt, the Appellant must still adduce evidence and convince the Court (looking at the factors set out in regulation 6302 of the ITR) that the children resided with her and that she primarily fulfilled the responsibility for their care and upbringing. Merely insisting that she paid for most of the child-related expenses is not enough.
The Court in the end preferred the evidence of the children’s father:
[44] In the end, I find that while the Appellant has incurred more than her share of the child related expenses and weekend activities, her claim that the children resided with her on an exclusive basis is simply not supported by the evidence. Having heard the evidence of both parents, I find that the “preponderance of probabilities” (Daimsis, supra) favours the father’s version of the events.
[45] To conclude, I am not prepared to disturb the conclusions reached by the Minister save for the following two exceptions based on the admissions made by the father:
i) The Appellant and the father were shared-custody parents in respect to A and C during the month of January 2014; and
ii) The Appellant was the eligible individual in respect to C for the month of July 2014.