Tax Court of Canada Judgments

Date: 19980824

Docket: 97-3206-IT-I

BETWEEN:

MARK CABOT,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Rip, J.T.C.C.

[1] Mark Cabot, the appellant, appeals from a determination of child tax benefit issued by the Minister of National Revenue (“Minister”) denying him child tax benefits for the month of July 1994 and for the period from September 1994 to June 1996. The parties agree that Mr. Cabot did all things that normally would be done by a person who primarily fulfilled the responsibility for the care and upbringing of one's children. The Minister, however, does not agree that the Appellant was the eligible individual, that is, the person who primarily fulfilled the responsibility for the care and upbringing of his children, in accordance with section 122.6 of the Income Tax Act ("Act"). Minister's counsel argued that the presumption in paragraph (f) of the subsection 122.6 definition of "eligible individual" is not rebuttable except for the circumstances described in subsection 6301(1) of the Income Tax Regulations ("Regulations").

[2] Mr. Cabot testified that he has two children from a common law marriage with France Vachon. In July 1994 the appellant and Ms. Vachon separated. Ms. Vachon agreed that Mr. Cabot would have custody of the children and during the months of July, August and part of September 1994 the children lived with Mr. Cabot in his mother's home. In September 1994, Mr. Cabot and the children were reunited with Ms. Vachon and they lived together for two years, that is from September 1994 to March 1996.

[3] In March 1996 Mr. Cabot was convicted of a crime and lived in a half-way house from March to October 1996 and was in prison during November and December 1996. During these five and a half months Mr. Cabot had no contact with the children and he agrees that during this time he did not have custody of the children.

[4] Mr. Cabot's position is that from August 10, 1994 to March 1996 he had custody of the children notwithstanding that the children and he were living together with their mother. During this time, Mr. Cabot stated, he was the parent who primarily fulfilled the responsibility for the care and upbringing of the children. He stayed home to care for the children. It was he who bought educational supplies (books) and clothing for the children, supplied the children with food and shelter and paid for all their needs. Mr. Cabot also testified that it was he who had received family allowance payments for the children; Ms. Vachon had received family allowance payments for a daughter from another relationship.

[5] Section 122.6 of the Income Tax Act ("Act") provides that:

In this subdivision,

[...]

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

[...]

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

[...]

[6] Subsection 6301(1) of the Income Tax Regulations reads as follows:

For the purposes of paragraph (g) of the definition “eligible individual” in section 122.6 of the Act, the presumption referred to in paragraph (f) of that definition does not apply in the circumstances where

(a) the female parent of the qualified dependant declares in writing to the Minister of National Health and Welfare that the male parent, with whom she resides, is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of each of the qualified dependants who reside with both parents;

(b) the female parent is a qualified dependant of an eligible individual and each of them files a notice with the Minister of National Health and Welfare under subsection 122.62(1) of the Act in respect of the same qualified dependant;

(c) there is more than one female parent of the qualified dependant who resides with the qualified dependant and each female parent files a notice with the Minister of National Health and Welfare under subsection 122.62(1) of the Act in respect of the qualified dependant; or

(d) more than one notice is filed with the Minister of National Health and Welfare under subsection 122.62(1) of the Act in respect of the same qualified dependant who resides with each of the persons filing the notices where such persons live at different locations.

[7] The issue, then, is whether or not the presumption in section 122.6 is rebuttable.

[8] Respondent's counsel appears to suggest that the four circumstances in which the presumption would not apply attract the legal maxim express unius est exclusion alterius. In other words, counsel suggests that because these four circumstances are identified, the failure to identify a fifth circumstance must therefore be interpreted as being intentional. I do not agree. A plain reading of the relevant sections of the Act and the Regulations suggests no intention by the draftsman that the presumption in section 122.6 is limited to the circumstances listed in subsection 6301(1) of the Regulations. None of the circumstances set out in Regulation 6301(1) contains a single factor that one may reasonably consider to have anything to do with the care and upbringing of children. The circumstances in Regulation 6301(1) are merely procedures to facilitate the administration of the child tax benefit. Factors that are to be considered in determining what constitutes care and upbringing of a child are set out in Regulation 6302[1] of the Regulations:

(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;

(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.

[9] The draftsman did not intend that only the four circumstances in subsection 6301(1) of the Regulations apply to reverse the presumption in section 122.6. Section 6302 of the Regulations sets out the criteria to determine which person qualifies as the eligible individual where more than one person applies for the child tax benefit with respect to a child. It also serves as a guide to rebut the presumption when a male person applies for the child tax benefit

[10] Furthermore, the word“presumed” is a term of ordinary use and is also one that has legal meaning. Legal use of the word permits the court to look beyond the ordinary or common usage to the technical or legal usage. Although the principles are the same as determining ordinary usage, the court may go beyond the dictionary meanings of the word and look at the common law’s usage of the term.[2]

[11] The Canadian Law Dictionary, 2d Ed.,[3] defines “presumption” at 174 as follows:

PRESUMPTION An assumption arising from a given set of facts that has sufficient evidentiary weight to require the production of further evidence to overcome the assumption thereby established. A presumption may be one of law or of fact. A PRESUMPTION OF LAW has been defined as “an arbitrary consequence expressly annexed by law to particular facts.” Se Re Claresholm Provincial Election: McVaught v. McKenzie (1912), 3 W.W.R. 133 at 137 (Alta. S.C.). A PRESUMPTION OF FACT has been defined as “an inference which the mind naturally and logically draws from given facts irrespective of their legal effect.” Id.

CONCLUSIVE [NON-REBUTTABLE] PRESUMPTION One that no evidence, however strong, no argument, or consideration will be permitted to overcome.

REBUTTABLE PRESUMPTION An ordinary presumption that must, as a matter of law, be made once certain facts have been proved, and that is thus said to establish a certain conclusion prima facie once those facts have been adduced; but it is one that may be rebutted. If it is not overcome through introduction of contrary evidence, it becomes conclusive.

(emphasis in original)

[12] The same dictionary defines the word “deemed” at 63:

DEEMED “... in deciding whether or not the use of the words ‘deem’ or ‘deemed’ establishes a conclusive or a rebuttable presumption depends largely upon the context in which they are used, always bearing in mind the purpose to be served by the statute and the necessity of ensuring that such purpose is served.” St. Leon Village Consolidated School District No. 1425 v. Ronceray (1960), 31 W.W.R. 385 at 391 (Man. C.A.).

Black’s Law Dictionary 6th Ed.[4] contains similar definitions for “presumption” but has little to say about the word “deem”, which is most likely an indication of its limited use in American statutes and jurisprudence. The Shorter Oxford English Dictionary on Historical Principles ("Shorter Oxford") defines the word "presumed", as used in law, as follows:

To take as proved until evidence to the contrary is forthcoming

Shorter Oxford includes the following in the definition of the word "deem":

to pronounce judgment ... to decree; to decide; ... to conclude, consider, hold ... to judge or think (in a specified way) ...

[13] As seen from the dictionary definitions, a presumption and a deeming provision can equally be considered rebuttable or conclusive. The interpretation of either word appears to be context sensitive. Therefore the statute within which the word is used must be considered.

[14] Besides section 122.6, the Act uses the word “presumed” in only one other provision, subsection 244(14), which reads as follows:

For the purposes of this Act, the day of mailing of any notice or notification described in subsection 149.1(6.3), 152(4) or 166.1(5) or of any notice of assessment shall be presumed to be the date of that notice or notification.

[15] The purpose of subsection 244(14) is to assist in identifying the date of mailing of a notice of assessment which, of course, is important for determining limitation periods for appeals. By and of itself, there is no indication that the presumption was intended to be conclusive or rebuttable. However, a finding that the presumption must be rebuttable is evidenced by the use of a different word in subsection 244(15) which reads:

Where any notice of an assessment has been sent by the Minister as required by this Act, the assessment shall be deemed to have been made on the day of mailing of the notice of the assessment.

[16] The word "deemed" and the word "presumed" may have different meanings at different times and one maybe rebuttable and the other may not be rebuttable depending on the particular wording of the statute. In R. v. Verrette, [1978] 2 S.C.R. 838 at 845 Beetz J. stated the following in regard to deeming provisions:

... A deeming provision is a statutory fiction; as a rule it implicitly admits that a thing is not what it is deemed to be but decrees that for some particular purpose it shall be taken as if it were that thing although it is not or there is doubt as to whether it is. A deeming provision artificially imports into a word or an expression an additional meaning which they would not otherwise convey beside the normal meaning which they retain where they are used; it plays a function of enlargement analogous to the word “includes” in certain definitions; however, “includes” would be logically inappropriate and would sound unreal because of the fictional aspect of the provision.

[17] The statutory use of “deemed” has not been limited to indicating a strictly conclusive presumption as noted by Schultz, J.A. in St. Leon Village Consolidated School District v. Ronceray (1960), 23 D.L.R. (2d) 32 (Man. C.A.) where after canvassing jurisprudence he stated the following at 37:

I think a consideration of these cases indicates that in deciding whether or not the use of the words "deem" or "deemed" establishes a conclusive or a rebuttable presumption depends largely upon the context in which they are used, always bearing in mind the purpose to be served by the statute and the necessity of ensuring that such purpose is served.

[18] It would appear that since the legislature use two different legal terms in the same section, it is probable that the legislature was of the view that words "deemed" and "presumed" have different meanings.

[19] In any event, section 122.6 does not use the word "deemed" and it is not necessary to identify if there is a contextual reason for interpreting the type of presumption that was intended by its use. However, it is worth noting that there are a number of sections in the Act that use “deemed” and most do not have a context that would indicate they are rebuttable.[5]

[20] The child tax benefit was introduced in 1993 to replace the family allowances, the tax credit for dependants under 18 years of age and the refundable child tax credit with a single non-taxable monthly payment made to the custodial parent of the child. The child tax benefit is to benefit the child. The child tax benefit provides the parent who primarily fulfils the responsibility for the care and upbringing of the child with funds to bring up the children.

[21] This is the reason that by virtue of subsection 122.6(4) of the Act the child tax benefit is not subject to bankruptcy or insolvency law and cannot be assigned, charged, attached or given as security. The benefit does not qualify as a refund under the Tax Rebate Discounting Act, cannot be retained by deduction or set-off under the Financial Administration Act and is not garnishable under the Family Orders and Agreements Enforcement Act. Also, subsection 164(2.2.) of the Act prevents the Minister from applying a child tax benefit payable to a taxpayer against that taxpayer's liability, except if the liability arose from the payment of an excess child tax benefit.

[22] To put the child tax credit benefit in the hand of a parent who is not fulfilling the responsibility for the care and upbringing of the child defeats the purpose of the child tax benefit. This, too, suggests that the presumption in the definition of "eligible individual" in section 122.6 is rebuttable.

[23] Section 122.6 is a recently enacted provision and there is little case law dealing with the presumption issue. In the informal income tax appeal of Semmler v. The Queen, [1997] 3 C.T.C. 2471, my colleague Judge Bowie considered the presumption in paragraph 122.6 to be a rebuttable one. He stated at 2477:

...In any event, whether or not there was an agreement between them, the presumption in favour of the children's mother exists with respect to the pre-separation period, in the absence of a declaration filed by Ms. Weiker. That presumption continues until at least the effective date of the Appellant's claim, on November 6, 1994. The Appellant can therefore only be entitled if he can overcome the presumption by evidence that establishes that he, and not Ms. Weiker, was the primary caregiver during that period. No such evidence is before me, and I therefore conclude that the Appellant has no entitlement prior to the beginning of November 1994. (emphasis mine) [6]

[24] The presumption in paragraph 122.6 with respect to “eligible individual” is rebuttable. The mother of the children of Mr. Cabot and Ms. Vachon was not the "eligible individual" within the meaning of section 122.6. On the facts at bar it is clear that Mr. Cabot had the custodial care of the children and that he, among other things, maintained an secure environment for the children, provided generally the guidance and companionship to the children and in general supervised the daily activities and needs of the children. Mr. Cabot was in fact the parent who primarily fulfilled the responsibility for the care and upbringing of the children. I find Mr. Cabot was the "eligible individual" for the purposes of section 122.6 for the children during the period July 1994 and the months of September 1994 to the end of February 1996.

[25] The appeal is allowed with costs, if any.

Ottawa, Canada, August 24, 1998.

"Gerald J. Rip"

J.T.C.C.

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