Létourneau
J.A.:
This
is
an
application
for
judicial
review
by
two
applicants
to
quash
a
decision
of
Judge
Tardif
of
the
Tax
Court
of
Canada.
Ultimately,
the
only
issue
before
us
was
whether
Mrs.
Laliberté
(the
applicant)
was
entitled
to
deduct,
in
respect
of
1990,
1991
and
1992,
the
interest
paid
on
a
mortgage
loan
she
took
out
in
1988
when
a
rental
property
belonging
to
her
husband,
on
which
she
had
a
second
mortgage,
was
repossessed.
The
applicant
used
$20,000
of
the
amount
so
borrowed
to
repay
the
first
mortgage
creditor.
However,
the
$20,000
loaned
by
the
first
mortgage
creditor
to
the
applicant’s
husband
in
1986
had
been
borrowed
not
to
produce
income,
but
to
pay
legal
costs
in
connection
with
a
civil
suit
unrelated
to
the
rental
property.
At
the
time,
the
applicant
had
guaranteed
her
husband’s
loan
and
stood
joint
and
several
surety
for
the
borrower
in
relation
to
the
lender.
Thus,
in
1988,
when
the
applicant
repaid
the
$20,000
owed
to
the
first
mortgage
creditor,
she
released
herself
from
her
obligation
as
guarantor,
so
the
amount
was
used
for
personal
purposes,
not
to
produce
income.
We
are
all
of
the
view
that
the
interest
deduction
claim
was
rightly
refused.
The
financial
difficulties
experienced
by
the
applicants
are
unfortunate
and
it
is
impossible
not
to
sympathize
with
them.
However,
the
applicable
statutory
provisions
in
the
case
at
bar
and
their
interpretation
by
the
courts
leave
us,
like
the
Judge
of
the
Tax
Court
of
Canada,
with
no
alternative
but
to
dismiss
the
applicant’s
claim.
The
application
for
judicial
review
will
be
dismissed.
Application
dismissed.
Email this Content