[1] This is an application for judicial review of a decision of the Tax Court under the Informal Procedure. The issue is whether the Tax Court Judge erred in determining that the applicant was not the "eligible individual" for child tax benefit purposes under section 122.6 of the Income Tax Act, R.S.C. 1985 c. 1 (5^th Supp.), with respect to his son Braden Nelson.

[2] The taxation years under appeal are 1994, 1995, 1996, 1997 and 1998.

[3] The applicant was divorced from Karen Elizabeth Putnam by divorce judgment pronounced on September 19, 1996. There are two children of the marriage, Kyla Elizabeth Nelson and Braden Steven Nelson. The applicant only seeks the child tax benefit for Braden, although he stresses that his responsibility for the care and upbringing of both children is the same. It would appear that the applicant is content that his former wife receive the child tax benefit for one child if he can receive the benefit for the other.

RELEVANT STATUTORY PROVISIONS

[4] In order to receive the child tax benefit, a person must be an "eligible individual" as defined in section 122.6 of the Income Tax Act. There are a number of conditions to be met by an "eligible individual" but the only condition at issue in this application is whether the applicant primarily fulfilled the responsibility for the care and upbringing of Braden.

[5] The definition of "eligible individual" in section 122.6 provides in relevant part:

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

(a)[...],

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

[...]

and for the purposes of this definition,

[...]

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

« _particulier admissible_ » S'agissant, à un moment donné, du particulier admissible à l'égard d'une personne à charge admissible, personne qui répond aux conditions suivantes à ce moment:

a) [...];

b) elle est la personne -- père ou mère de la personne à charge -- qui assume principalement la responsabilité pour le soin et l'éducation de cette dernière;

[...]

et aux fins de cette définition,

[...]

h) les critère prévus par règlement serviront à déterminer en quoi consistent le soin et l'éducation d'une personne.

[6] The prescribed factors are contained in section 6302 of the Income Tax Regulations, C.R.C., c. 945.

6302. For the purposes of paragraph (h) of the definition "eligible individual" in section 122.6 of the Act, the following factors are to be considered in determining what constitutes care and upbringing of a qualified dependant:

(a) the supervision of the daily activities and needs of the qualified dependant;

(b) the maintenance of a secure environment in which the qualified dependant resides;

(c) the arrangement of, and transportation to, medical care at regular intervals and as required for the qualified dependant;

(d) the arrangement of, participation in, and transportation to, educational, recreational, athletic or similar activities in respect of the qualified dependant;

(e) the attendance to the needs of the qualified dependant when the qualified dependant is ill or otherwise in need of the attendance of another person;

(f) the attendance to the hygienic needs of the qualified dependant on a regular basis;

6302. Pour l'application de l'alinéa h) de la définition de « particulier admissible » à l'article 122.6 de la Loi, les critères suivants servent à déterminer en quoi consistent le soin et l'éducation d'une personne à charge admissible :

a) le fait de surveiller les activités quotidiennes de la personne à charge admissible et de voir à ses besoins quotidiens;

b) le maintien d'un milieu sécuritaire là où elle réside;

c) l'obtention de soins médicaux pour elle à intervalles réguliers et en cas de besoin, ainsi que son transport aux endroits où ces soins sont offerts;

d) l'organisation pour elle d'activités éducatives, récréatives, athlétiques ou semblables, sa participation à de telles activités et son transport à cette fin;

e) le fait de subvenir à ses besoins lorsqu'elle est malade ou a besoin de l'assistance d'une autre personne;

f) le fait de veiller à son hygiène corporelle de façon régulière;

(g) the provision, generally, of guidance and companionship to the qualified dependant; and

(h) the existence of a court order in respect of the qualified dependant that is valid in the jurisdiction in which the qualified dependant resides.

g) de façon générale, le fait d'être présent auprès d'elle et de la guider;

h) l'existence d'une ordonnance rendue à son égard par un tribunal qui est valide dans la juridiction où elle réside.

DECISION OF THE TAX COURT JUDGE

[7] Under paragraph 122.6(f), there is a presumption that, where the qualified dependant resides with the dependant's female parent, the female parent is the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant. However, relying on Pollak v. Canada, [1999] T.C.J. No. 52, 2 C.T.C. 2225, the Tax Court Judge found that the presumption did not apply in this case and it is not an issue in this application.

[8] The Tax Court Judge reviewed the evidence as to who primarily fulfilled the responsibility for the care and upbringing of Braden. On reviewing the evidence, she concluded that the mother had marginally more input than the applicant:

When I review the factors set out in (a) to (g) of section 6302, the evidence indicates that both parties satisfactorily fulfill [sic] these functions although in some areas one parent more than the other. When the evidence is viewed as a whole, however, I conclude that the mother, Karen Putnam, has marginally more input into the care and guidance of Braden than does the father.

[9] The Tax Court Judge then considered paragraph (h) in section 6302. The Corollary Relief Judgment of the Supreme Court of Nova Scotia dated December 17, 1996, provided in its preamble, amongst other things:

AND UPON FINDING the children's primary residence is with the Petitioner, Karen Elizabeth Nelson;

The Tax Court Judge concluded that this tipped the weight more significantly in favour of the mother:

When I look at the final factor (h) of Section 6302 of the Regulations and review the wording of the court orders, this tips the weight more significantly in favour of the mother and reinforces my finding that she is the "eligible individual" to receive the child tax benefit. The existence of a court order is one of the factors this Court is directed to consider in determining "care and upbringing of a qualified dependant". The corollary relief judgment of Justice Hood dated December 17, 1996 recognizes that the children's primary residence is with the mother and that the father is to pay support.

ANALYSIS

[10] The applicant says that the Tax Court Judge made findings of fact without regard to the evidence. One such finding is that "the evidence indicated home and school meetings were attended by the mother but not the father."

[11] The applicant points to a letter from the secretary of the Bel Ayr School which Braden attended. The letter states in part:

As the school secretary, I see their father on a regular basis. Mr. Nelson is heavily involved here at the school. He is seen on a daily basis coming and going from school with his children, serves twice weekly as a volunteer monitor for his own children's computer classes, and belongs to the Home and School Association. As the children are always seen with their father, I have no recollection of who their mother is. [emphasis added]

He then refers to the cross-examination of his former wife, Karen Putnam, where she is asked:

Have you ever belonged to the Home and School?

and she answers:

No.

It appears that it was the applicant and not the mother who belonged to the Home and School Association and attended its meetings.

[12] In most cases, such an error would not assume material significance. However, in this case, the Tax Court Judge was faced with evidence that did not point clearly in one direction. Indeed, the Tax Court Judge concluded, on the evidence, that the mother only had marginally more input into the care and guidance of Braden than the father. In such a marginal case, it is not clear what conclusion the learned Tax Court Judge would have reached had she not made the error in respect of the home and school meetings.

[13] There is another concern with the reasoning of the Tax Court Judge and that has to do with her consideration of the Corollary Relief Judgment. If the content of that Judgment is duplicative of the matters already considered by the Tax Court Judge in her own analysis, then it cannot serve to tip the balance in favour of the mother. To do so would result in double counting.

[14] In her own analysis of which parent had the primary responsibility for the care and upbringing of the children, the Tax Court Judge considered the Corollary Relief Judgment of December 17, 1996, and in particular, that it found that the children were placed in the joint custody of both parents, that the children's primary residence was with the mother and that the applicant was to pay monthly support payments:

The Appellant and his former spouse divorced in December 1996, although they had separated several years prior to this. They had two children, Kyla and Braden. By a Corollary Relief Judgment dated December 1996 (filed as Exhibit A-7 as part of Exhibit A-10) the children were placed in the joint custody of both parents. The Judgment was based upon a finding that the children's primary residence was with the mother, Karen Putnam. The Appellant was provided access based on his four-week work cycle. This judgment contained a provision whereby the Appellant was to pay monthly support for his children, which payments were reduced by later order of Justice MacAdam (Exhibit R-1). By this latter court order, extraordinary expenses of the children were split between the parents on the basis of their respective incomes.

[15] When the Tax Court Judge viewed the evidence as a whole, she reached the conclusion that the mother had marginally more input into the care and guidance of Braden than did the father. The evidence as a whole included both the evidence relating to factors (a) to (g) in section 6302 of the Regulations and also the evidence relating to the Corollary Relief Judgment. It seems to me that when the Tax Court Judge considered the same Corollary Relief Judgment again, in concluding that the Judgment tipped the weight significantly in favour of the mother, that she was inadvertently engaging in double counting. Having already considered the Judgment in concluding that the mother had marginally more input than the father, I do not see how she could again consider the same Judgment to further tip the balance in favour of the mother.

[16] Even if her reference to viewing the evidence as a whole was not intended to include consideration of the Corollary Relief Judgment, I am still of the view that there was at least an element of double counting taking place. Factors (a) to (g) in section 6302 of the Regulations address the input by each parent into the care and upbringing of the children. Without some explanation as to why the primary residence finding in the Corollary Relief Judgment is significant, it appears to me that much, if not all, of that significance is captured in the analysis of the section 6302 (a) to (g) factors.

[17] The jurisprudence cited by the Tax Court Judge indicates that there is no mechanism for splitting the child tax benefit between divorced parents where both, rather evenly, contribute to the care and upbringing of the children as in this case (see Pollak, supra and Canada v. Marshall, [1996] F.C.J. No. 431, 96 D.T.C. 6292 (C.A.)). However, I would observe that the applicant does not claim the child tax benefit for both his children. He is content to have his former wife receive the benefit for one child. He only asks that he receive the benefit for one child.

[18] Having regard to the error the Tax Court Judge made with respect to the home and school meetings, because the "marginally more input" finding is reflective of a very close call, and because I think that the way in which the Tax Court Judge considered the Corollary Relief Judgment was in error, I am of the opinion that the judicial review should be allowed with costs and that the matter should be remitted to the Tax Court for redetermination. It will, of course, be open to the Tax Court Judge conducting the reconsideration as to whether the existing record should be taken as evidence in the reconsideration or whether fresh evidence in its entirety would be more appropriate.

"Marshall Rothstein"

"I agree J.A.

A.J. Stone J.A."

"I agree

J.D. Denis Pelletier J.A."

FEDERAL COURT OF APPEAL

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: A-280-01

STYLE OF CAUSE: STEVEN WILLETT NELSON v.

ATTORNEY GENERAL OF CANADA

PLACE OF HEARING: HALIFAX, NOVA SCOTIA

DATE OF HEARING: NOVEMBER 5, 2002

REASONS FOR JUDGMENT : ROTHSTEIN J. A.

CONCURRED IN BY: STONE, PELLETIER JJ.

DATED: NOVEMBER 18, 2002

APPEARANCES:

STEVEN WILLETT NELSON APPLICANT ON HIS OWN

BEHALF

V. LYNN W. GILLIS FOR THE RESPONDENT

SOLICITORS OF RECORD:

MORRIS ROSENBERG, DEPUTY FOR THE RESPONDENT

ATTORNEY GENERAL OF CANADA

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