Date: 20020815

Docket: 2001-3582-IT-I

BETWEEN:

DIXIE FUNK,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Bell, J.T.C.C.

ISSUE:

[1]      The issue is whether the Appellant was, for the period from September 1, 1999 to April 30, 2001, within the meaning of section 122.6 of the Income Tax Act ("Act"), an "eligible individual" respecting the "Canada Child Tax Benefit" ("Benefit").

[2]      The term "eligible individual" is defined in that section 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 or, where the person is the cohabiting spouse or common-law partner of a person who is deemed under subsection 250(1) to be resident in Canada throughout the taxation year that includes that time, was resident in Canada in any preceding taxation year,

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

(e) is, or whose cohabiting spouse or common-law partner is, a Canadian citizen or a person who

(i) is a permanent resident (within the meaning of 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,

(iii) was determined before that time under the Immigration Act, or regulations made under that Act, to be a Convention refugee, or

(iv) was determined before that time to be a member of a class defined in the Humanitarian Designated Classes Regulations made under the Immigration Act,

and for the purposes of this definition,

(f) where a 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 prescribed circumstances, and

(h) prescribed factors shall be considered in determining what constitutes care and upbringing;

[3]      The term "qualified dependant" is defined in section 122.6 as:

"qualified dependant" at any time means a person who at that time

(a) has not attained the age of 18 years,

(b) is not a person in respect of whom an amount was deducted under paragraph (a) of the description of B in subsection 118(1) in computing the tax payable under this Part by the person's spouse or common-law partner for the base taxation year in relation to the month that includes that time, and

(c) is not a person in respect of whom a special allowance under the Children's Special Allowances Act is payable for the month that includes that time;

FACTS RELATING TO WHETHER THE APPELLANT "RESIDES" WITH THE QUALIFIED DEPENDANT:

[4]      Because the conditions outlined in the above definition are cumulative, I shall set forth the facts as they relate to each relevant paragraph commencing with paragraph (a) of the definition of "eligible individual".

[5]      The Appellant applied for and received the Benefit in respect of the period from September 1, 1999 to April 30, 2001. A notice dated May 18, 2001 from the Canada Customs & Revenue Agency ("Revenue") advised her that she was not eligible to receive the Benefit with respect to that period and sought the return to it of an overpayment in the sum of $2,900.

[6]      During the period in question the Appellant and Todd Trueman ("Todd"), the father of Saxon who was born on October 1, 1985, lived in separate premises.

[7]      By virtue of a Consent Order issued by the Manitoba Queen's Bench (Family Division) dated April 13, 1995 the Appellant was granted sole custody of Saxon, with Todd having "reasonable, liberal access to the said child at such times as the parties may mutually agree".

[8]      Appellant's counsel presented evidence from Margaret Funk ("Margaret"), the Appellant's mother, and a Miss Taylor ("Taylor"), a friend of the Appellant and from the Appellant. Although Margaret's evidence was substantially hearsay, she stated, with respect to the Appellant:

Yes, she did have an extra room and Saxon used to come home on the week-ends, Friday night to Sunday morning.

She then revised her statement to refer to Sunday night instead of Sunday morning. On cross-examination of the Appellant the following exchange took place:

Q.         Saxon Funk, your grandson, chose to stay with his father -

A.         Yes, he did.

Q.         And not with his mother?

A.         That's right. Well, he didn't really stay with his dad. He stayed with the grandparents.

[9]      On re-examination, the transcript reads:

Q.         On week-ends he was at your daughter's and during the week mostly he was with the grandparents?

A.         Right.

[10]     Taylor's evidence included the statement that in the summer of 2000 Saxon, being a friend of her son, spent at least three weeks of the month of August at her house. Her other evidence had nothing to do with residence.

[11]     The Appellant's evidence dealt with conflict and strife between her and Saxon and was directed substantially towards establishing that she qualified under paragraph (b) of the above definition of "eligible individual". At one point she said, with respect to a calendar she introduced in evidence:

Throughout the calendar it states when Saxon was coming home, every week-end where that was an agreement that my son, now enrolled in Lindenwood School, which he was not supposed to be, but now was, and in order to keep everything pretty calm between me and Saxon I allowed him to be over at his grandparents' to attend Lindenwood School and the agreement was that he was to come home every week-end while we worked out our issues.

The Appellant stated that she kept a room for Saxon. A portion of the Appellant's evidence reads as follows:

Q.         Saxon Funk went to live with his dad from Mondays through Fridays beginning in August or September, 1999?

A.         He ran away to his grandparents' home where his dad lived.

[12]     Todd testified that Saxon, in the relevant period, was living with him and stated:

Permanently, twenty-four hours a day.

He stated that Saxon went to his mother's place approximately three times in the twelve month period commencing July, 1999. He added:

And I believe he might have even slept there once, maybe twice.

He testified that he had applied for a Benefit.

On cross-examination the following exchange took place between Todd and Appellant's counsel:

Q.        I put it to you that he was there regularly on the week-ends. Do you agree or not?

A.         I completely and utterly disagree.

This was with reference to the Appellant's residence.

ANALYSIS AND CONCLUSION:

[13]     The evidence of the Appellant and of Todd respecting the question of where Saxon resided was markedly different. Obviously, the evidence of one or both such witnesses is at variance with the actual facts.

[14]     I noted at the hearing that Saxon, who was then in his 17th year, was not present in Court to give evidence. His testimony would have been of great assistance to the Court in determining where he resided during the period in question. In Blatch v. Archer, (1774), I Cowp. 63, at p. 65 Lord Mansfield stated:

It is certainly a maxim that all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted.

In The Law of Evidence in Civil Cases, by Sopinka and Lederman, the authors comment on the effect of failure to call a witness and, after setting forth the above, quote this statement:

The application of this maxim has led to a well-recognized rule that the failure of a party or a witness to give evidence, which it was in the power of the party or witness to give and by which the facts might have been elucidated, justified the Court in drawing the inference that the evidence of the party or witness would have been unfavourable to the party to whom the failure was attributed.

In the case of a plaintiff who has the evidentiary burden of establishing an issue, the effect of such an inference may be that the evidence led will be insufficient to discharge the burden. (Levésque v. Comeau, [1970] S.C.R. 1010, (1971). 16 D.L.R. (3d) 425) [emphasis added in the original text]

See also Markakis v. M.N.R., 86 DTC 1237 (TCC), Sedelnick Estate v. M.N.R., 86 DTC 1563(TCC) and Christensen v. The Queen, 98 DTC 1893.

No satisfactory explanation having been proferred respecting the failure to produce Saxon as a witness presents the obvious question as to the reason for such failure. The logical inference is that the Appellant did not want him to testify or did not want him subjected to cross-examination, or both.

[15]     The onus was on the Appellant to establish that she was entitled to succeed in her appeal. Her testimony, not set forth above, was substantially in respect of care that she had given her son. It is common ground that Saxon spent at least five days a week living outside his mother's residence. That, combined with the failure to produce Saxon, who could have assisted the Court greatly in its determination respecting residence, leads me to the conclusion that the Appellant has failed to meet the onus upon her to establish the condition set out in the definition of "eligible individual", namely that she resided with Saxon, the qualified dependant.

[16]     The Appellant having failed to meet the first conditions of "eligible individual", there is no need to examine the others. Accordingly, the appeal will be dismissed.

Signed at Ottawa, Canada this 15th day of August, 2002.

"R.D. Bell"

J.T.C.C.

COURT FILE NO.:                             2001-3582(IT)I

STYLE OF CAUSE:                           Dixie Funk v. Her Majesty the Queen

PLACE OF HEARING:                      Winnipeg, Manitoba

DATE OF HEARING:                        June 7, 2002

REASONS FOR JUDGMENT BY:     The Honourable Judge R.D. Bell

DATE OF JUDGMENT:                     August 15, 2002

APPEARANCES:

Counsel for the Appellant:          Antoine Hacault

Counsel for the Respondent:      Michael Van Dam, Student-at-Law

COUNSEL OF RECORD:

For the Appellant:

Name:                 Antoine Hacault

Firm:                  Thompson, Dorfman, Sweatman

                                                          Winnipeg, Manitoba

For the Respondent:                  Morris Rosenberg

                                                Deputy Attorney General of Canada

                                                          Ottawa, Canada

2001-3582(IT)I

BETWEEN:

DIXIE FUNK,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on June 7, 2002 at Winnipeg, Manitoba, by

the Honourable Judge R.D. Bell

Appearances

Counsel for the Appellant:                    Antoine Hacault

Counsel for the Respondent:                Michael Van Dam, Student-at-Law

JUDGMENT

          The appeal from the reassessment made under the Income Tax Act with respect to the Canada Child Tax Benefit for the 1998 and 1999 base taxation years, notice of which was dated May 18, 2001, is dismissed in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada this 15th day of August, 2002.

"R.D. Bell"

J.T.C.C.