Teitelbaum,
J:—This
is
an
appeal,
by
way
of
a
statement
of
claim,
by
plaintiff,
Her
Majesty
the
Queen,
from
a
judgment
of
the
Tax
Court
of
Canada.
The
facts
of
this
case
can
best
be
summarized
as
follows:
The
defendant,
David
A.
Sadavoy
(Sadavoy),
an
accountant,
is
married
to
Nicole
Sadavoy.
Two
children
were
born
from
the
marriage.
During
the
1980
and
prior
taxation
years,
the
Government
of
Canada
sent
family
allowance
cheques
to
the
Sadavoys
on
account
of
the
children
born
of
the
marriage
pursuant
to
the
Family
Allowance
Act,
1973.
Sadavoy
alleges
that
the
allowance
was
generally
deposited
into
his
bank
account.
During
the
1982
and
1983
taxation
years,
the
family
allowance
was
paid
and
received
by
Sadavoy
in
the
amounts
of
$645.84
in
1982
and
$684.48
in
1983.
Sadavoy,
in
filing
his
income
tax
returns
for
the
1982
and
1983
taxation
years,
sought
to
deduct
in
computing
his
income
the
amounts
of
$1,950
in
1982
and
$4,106
in
1983
on
account
of
legal
fees
he
claims
were
incurred
for
the
purpose
of
maintaining
the
family
allowance
in
his
income.
The
Minister
of
National
Revenue
(Minister),
in
assessing
the
taxes
payable
by
Sadavoy
for
the
1982
and
1983
taxation
years
did
not
allow
the
deduction
of
the
legal
fees
on
the
basis
that
the
legal
fees
were
not
incurred
for
the
purpose
of
gaining
or
producing
income
from
a
business
or
property.
Sadavoy
objected
to
the
said
assessments
of
tax.
The
Minister
confirmed
the
assessments
of
tax
and
Sadavoy
appealed
the
Minister's
decision
to
the
Tax
Court
of
Canada.
The
Tax
Court
of
Canada
allowed
Sadavoy's
appeal.
Plaintiff,
in
her
statement
of
claim,
alleges
that
the
Minister,
in
assessing
the
taxes
payable
by
Sadavoy
for
the
1982
and
1983
taxation
years
and
disallowing
the
deduction
claimed
relied
upon
the
following
findings
or
assumptions
of
fact:
(a)
the
facts
above
mentioned,
or
alternatively
(b)
if
the
legal
fees
were
paid
by
Sadavoy
for
the
purpose
of
receiving
family
allowance,
it
is
submitted
that
the
legal
fees
were
paid
to
establish
the
right
to
receive
such
allowance,
and
as
such
were
outlays
on
account
of
capital
and
not
deductible
in
computing
income
by
virtue
of
paragraph
18(1)(b)
of
the
Income
Tax
Act.
Sadavoy,
in
his
statement
of
defence,
alleges
that
the
Tax
Court
of
Canada,
in
allowing
the
appeal
relied
upon
the
following
findings
of
facts:
(a)
the
legal
fees
incurred
by
the
defendant
were
not
incurred
with
respect
to
divorce
and
other
related
matters;
(b)
the
legal
fees
incurred
by
the
defendant
were
incurred
to
re-establish
his
right
to
the
family
allowance,
by
means
of
a
custody
ruling;
(c)
the
legal
fees
incurred
by
the
defendant
were
incurred,
not
to
bring
a
new
right
into
existence,
but
to
confirm
his
existing
right
to
the
family
allowance;
Sadavoy
further
alleges
that
his
said
legal
expenses
were
incurred
for
the
purpose
of
gaining
or
producing
income
and
were
therefore
deductible
in
computing
income
pursuant
to
paragraph
18(1)(b)
of
the
Income
Tax
Act.
He
submits
that
the
said
legal
expenses
were
not
incurred
with
respect
to
divorce
and
other
related
matters
and
therefore
were
not
personal
expenses
prohibited
from
deduction
in
computing
income
under
paragraph
18(1)(h)
of
the
Income
Tax
Act.
Sadavoy
also
submits
that
the
legal
fees
were
not
outlays
of
capital
pursuant
to
paragraph
18(1)(b)
of
the
Income
Tax
Act
but
were
incurred
for
the
purpose
of
maintaining
the
family
allowance
in
his
income
and,
as
such,
were
expenses
that
are
deductible
from
his
income
for
tax
purposes.
No
evidence
was
submitted
as
to
what
finding
of
facts
the
Tax
Court
of
Canada
relied
upon
to
arrive
at
the
decision
of
November
1,
1985.
The
present
proceeding
is
a
trial
de
novo
and
what
may
or
may
not
have
occurred
before
the
Tax
Court
of
Canada
or
what
facts
the
Tax
Court
of
Canada
relied
upon
is
of
no
consequence
to
the
proceedings
before
me.
Counsel
for
plaintiff
puts
forth
four
legal
submissions
as
to
her
position.
They
are:
1.
The
factual
submission,
that
is,
the
legal
expenses
were
incurred
by
Sadavoy
for
the
purpose
of
settling
the
custody
issue
and
the
issue
of
access
to
the
children.
2.
In
the
alternative,
the
legal
expenses
were
not
incurred
to
earn
income
from
a
business
or
property
but
were
personal
living
expenses
of
Sadavoy.
3.
In
the
alternative,
the
legal
expenses
were
incurred
on
account
of
capital;
and
4.
In
the
alternative,
that
subdivision
d
of
Division
B
of
the
Income
Tax
Act
provides
a
complete
code
for
the
tax
treatment
of
other
sources
of
income.
The
relevant
paragraphs
in
the
Income
Tax
Act
are
18(1
)(a),
(b)
and
(h)
and
Division
B,
Subdivision
(d)
in
speaking
of
other
sources
of
income
and
in
particular
subsection
56(5).
Paragraphs
18(1)(a),
(b)
and
(h)
state:
18.
(1)
General
limitations.
—
In
computing
the
income
of
a
taxpayer
from
a
business
or
property
no
deduction
shall
be
made
in
respect
of
(a)
general
limitation.
—
an
outlay
or
expense
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property;
(b)
capital
outlay
or
loss.
—
an
outlay,
loss
or
replacement
of
capital,
a
payment
on
account
of
capital
or
an
allowance
in
respect
of
depreciation,
obsolescence
or
depletion
except
as
expressly
permitted
by
this
Part;
(h)
personal
or
living
expenses.
—
personal
or
living
expenses
of
the
taxpayer
except
travelling
expenses
(including
the
entire
amount
expended
for
meals
and
lodging)
incurred
by
the
taxpayer
while
away
from
home
in
the
course
of
carrying
on
his
business;
Subsection
56(5)
states:
56.
(5)
Family
Allowance
Act,
1973.
—
Subject
to
subsection
(6),
a
taxpayer
who
is
deemed
by
subsection
(7)
to
have
supported
a
child
in
a
taxation
year,
in
respect
of
whom
(a)
a
family
allowance
under
the
Family
Allowances
Act,
1973,
or
(b)
an
allowance
under
a
law
of
a
province
that
provides
for
payment
of
an
allowance
similar
to
the
family
allowance
provided
under
the
Family
Allowances
Act,
1973
has
been
paid
in
the
taxation
year,
shall
include
in
computing
his
income
for
the
taxation
year
an
amount
equal
to
the
said
allowance.
Although
it
is
normal
for
a
plaintiff
to
commence
to
make
proof
at
a
trial,
in
this
case
I
was
informed
by
counsel
for
plaintiff
that
she
had
agreed
with
counsel
for
defendant
that
it
would
be
defendant
who
would
proceed
first.
Both
parties,
by
consent,
agreed
to
admit
each
other's
book
of
documents
as
Exhibit
P-1
and
Exhibit
D-1.
The
position
of
Sadavoy,
according
to
his
counsel
in
giving
a
brief
resumé
of
his
case,
is
that
Sadavoy
incurred
legal
expenses,
the
purpose
for
which
these
expenses
were
incurred
was
to
establish
or
confirm
his
right
to
the
receipt
of
the
family
allowance
payments
for
his
two
children
and
that,
as
a
result,
these
legal
expenses
are
deductible
from
his
income
for
tax
purposes.
In
Sadavoy's
counsel's
words:
.
.
.
the
Family
Allowance
is
a
right,
a
property
right
by
definition
under
the
Act
and
therefore
the
purpose
of
the
action
(Divorce
Action)
was
to
obtain
income
from
property
to
which
he
was
entitled
(Page
2,
Transcript
of
Trial)
The
only
witness
called
by
the
defence
was
the
defendant
David
Sadavoy.
He
states
that
on
June
15,
1985
[sic]
he
married
one
Nicole
and
that
there
were
two
children
born
of
the
said
marriage,
a
girl,
Vanessa
and
a
boy,
Daniel.
Mr.
Sadavoy
relates
that
in
early
June
1981
he
separated
from
his
wife
but
that
before
separating
he
discussed
the
terms
of
a
separation
agreement
with
her.
He
relates
that
he
and
his
wife
had
arrived
at
a
verbal
agreement
with
regard
to
the
custody
of
the
children,
that
is,
"we
would
share
the
children
equally.
They
would
each
have
a
principal
residence
with
each
of
us
and
we
would
share
the
social
benefits
attributable
to
that
arrangement
equally"
(page
7,
Transcript).
With
regard
to
the
family
allowance,
Sadavoy
states,
in
speaking
of
the
alleged
verbal
agreement
"She
(wife
Nicole)
would
have
received
the
family
allowance
for
the
child
who
was
living
with
her
and
I
would
have
received
the
family
allowance
for
the
child
who
would
have
been
living
with
me".
Sadavoy
states
that
the
issue
of
one
child
living
with
one
parent
and
the
other
child
with
the
other
parent
was
part
of
the
verbal
agreement.
I
believe
that
it
is
important
to
note
that
Sadavoy
states
that
the
above
was
agreed
to
in
a
verbal
agreement
with
his
wife.
Since
Sadavoy
was
the
only
witness
to
testify,
the
alleged
verbal
agreement
was
not
confirmed
by
his
wife
Nicole,
nor,
as
will
be
seen,
was
the
alleged
verbal
agreement
confirmed
in
writing.
The
alleged
verbal
agreement
was
reached
between
Sadavoy
and
his
wife
at
the
end
of
June
or
beginning
of
July
1981.
Although
Sadavoy
did
not
want
to
deal
with
lawyers,
his
wife,
he
states,
told
him
she
wanted
to
obtain
legal
advice
and
that
she
would
have
her
attorney
draft
the
proposed
(verbal)
agreement
and
then
send
it
to
Sadavoy's
attorney.
It
is
the
witness
himself
who
states
with
regard
to
the
alleged
agreement
“My
wife
wanted
legal
advice
so
she
told
me
that
she
would
have
her
lawyer
draft
the
proposals
up
and
send
them
to
my
lawyer”.
This
indicates
to
me
that
no
agreement
had
been
reached
between
Sadavoy
and
his
wife.
All
that
I
can
assume
from
Sadavoy's
statement
is
that
he
had
made
certain
proposals
as
to
the
family
allowance
and
where
the
children
would
live.
His
wife
then
decided
to
obtain
legal
advice
with
regard
to
these
proposals,
not
with
regard
to
a
final
agreement.
In
fact,
a
written
proposal
was
submitted
by
the
attorney
representing
Mrs.
Sadavoy.
It
should
be
noted
that
there
is
no
mention
of
family
allowance
or
that
one
child
would
reside
with
each
parent
in
the
written
proposal
of
Mrs.
Sadavoy.
What
is
proposed
by
Sadavoy's
wife
is
that
the
parties,
defendant
and
his
wife,
would
be
willing
to
try
having
the
children
for
alternate
weeks,
with
the
principal
residence
being
with
Mrs.
Sadavoy
(Tab
1,
Exhibit
D-1).
Sadavoy
refused
to
sign
the
agreement
because,
he
states,
it
failed
to
reflect
what
he
believed
he
agreed
to
in
the
verbal
agreement
he
made
with
his
wife.
He
states
he
did
not
agree
to
the
issue
of
joint
custody
as
worded
in
the
written
proposal
nor
with
regard
to
the
issue
of
principal
residence.
He
did,
he
states,
agree
to
the
proposal
on
access.
As
a
reason
for
not
agreeing
to
the
proposal
that
the
principal
residence
be
with
Mrs.
Sadavoy,
the
defendant
states:
.
.
.
the
fact
that
she
was
not
in
agreement
meant
that
there
would
not
be
two
principal
residences
and
we
would
not
be
sharing
the
Family
Allowance
Sadavoy
then
goes
on
to
state,
when
asked
to
elaborate
as
to
his
objection
to
the
issue
of
residence,
”.
.
.
the
issue
here
is
one
of
equality
as
far
as
I
am
concerned".
In
the
middle
of
August
1981,
Sadavoy
had
a
meeting
with
his
wife
who,
he
states,
refused
to
change
the
written
proposal
to
read
as
was
agreed
verbally,
she
was
not
willing
to
treat
Sadavoy
equally
and
this
seems
most
important
to
him,
so
he
decided
"to
go
to
Court".
Sadavoy
states
that
he
wanted
the
family
allowance.
In
order
to
obtain
the
family
allowance
given
by
the
Government
of
Canada,
he
was
told
by
his
lawyer
he
had
to
proceed
with
a
divorce
petition
and
obtain
custody
of
the
children.
He
therefore,
he
states,
sued
for
divorce
and
filed
a
motion
to
obtain
custody
of
the
children
(Tabs
8
and
9,
Exhibit
D-1).
Mr.
Sadavoy
informed
me,
during
his
testimony
that
he
was
never
interested
in
the
custody
of
the
children.
He
was
only
interested
in
the
family
allowance
he
would
get
by
having
custody
of
his
children.
Was
the
Family
Allowance
the
sole
reason
for
taking
the
custody
action?
Yes.
You
were
not
interested
in
the
custody
of
the
children
at
all?
It
was
just
to
get
the
Family
Allowance?
That
is
right.
(Pages
21
&
22,
Transcript)
In
relation
to
what
happened
with
the
family
allowance
cheques
received
during
the
marriage,
Sadavoy
related
that
he
considered
the
cheques
payable
to
both
parents,
were
deposited
to
his
bank
account
or
to
a
joint
bank
account,
I
assume
"joint"
being
he
and
his
wife,
and
that
it
(the
cheques)
was
something
that
he
counted
on.
He
states
he
had
been
including
the
family
allowance
in
his
income
for
tax
purposes.
In
order
to
try
to
explain
away
the
facts
alleged
by
himself
in
the
affidavits
filed
with
his
motion
for
custody,
Sadavoy
states
he
was
not
aware
he
would
have
to
file
affidavits,
nor
what
they
would
have
to
contain.
He
admits
he
signed
the
affidavits
which
affidavits
were
critical
of
his
wife’s
conduct.
After
filing
the
petition
for
divorce
and
motion
for
custody,
Sadavoy
received,
on
September
17,
1981,
interim
custody
of
his
children
(Tab
19,
Exhibit
P-1).
He
then
wrote
a
letter
to
Health
and
Welfare
Canada
and
advised
the
Department
that
he
had
custody
of
his
children.
He
began
to
receive
the
family
allowance
in
November
1981.
Sadavoy
informed
me
that
he
never
proceeded
to
obtain
a
divorce
decree,
that
as
of
the
date
of
trial
he
has
a
joint
custody
arrangement
and
that
the
family
allowance
for
the
children
goes
to
both
parents,
that
is,
he
gets
the
family
allowance
for
one
child
and
his
wife
for
the
other.
His
wife
resides
with
a
Mr.
Rogers.
Mr.
Sadavoy
was
subjected
to
a
thorough
cross-examination,
particularly
with
regard
to
the
affidavits
he
signed
when
filing
his
petition
for
divorce,
his
motion
for
custody
and
when
contesting
custody
and
access
motions
made
by
his
wife.
Mr.
Sadavoy
is
a
graduate
with
a
Masters
degree
in
business
administration
and
is
a
chartered
accountant.
I
am
satisfied
that
I
can
assume
that
Sadavoy
understood
what
he
was
signing
when
he
signed
the
affidavits
that
have
been
filed
into
the
present
record.
For
the
1982
taxation
year,
Sadavoy
had
a
total
income
of
$29,259.74
including
$645.84
received
by
him
representing
the
family
allowance.
In
this
taxation
year,
Sadavoy
deducted
$1,950
as
legal
fees
which
is
one
of
the
sums
in
issue.
For
the
1983
taxation
year,
Sadavoy
had
a
total
income
of
$43,065.91
including
$684.48
received
by
him
representing
the
family
allowance.
In
this
taxation
year,
he
deducted
$4,106
as
legal
fees
which
is
the
other
sum
in
issue.
Sadavoy
was
referred
to
an
affidavit
he
signed
and
swore
to
on
September
2,
1987
(Tab
12,
Exhibit
P-1).
He
states
that
the
contents
in
the
affidavit
are
true.
This
affidavit
was
filed
on
behalf
of
Sadavoy's
claim
for
interim
custody
of
his
children.
It
contains
a
total
of
44
paragraphs
relating
the
facts
why
Sadavoy
believes
he
should
be
granted
custody
of
his
children.
It
is
glaringly
apparent,
after
reading
the
affidavit,
that
at
no
time
does
Mr.
Sadavoy
state
that
the
only
reason
that
he
requests
custody
of
the
children
is
to
obtain
the
family
allowance.
No
mention
of
family
allowance
is
made
in
this
or
any
other
affidavit
of
the
defendant
filed
into
the
present
record.
It
becomes
apparent
that
the
reason
he
is
requesting
custody
of
the
children
is
his
own
concern
for
the
welfare
of
his
children.
He
believes
their
mother
is
not
a
fit
person
to
have
custody
of
the
children.
He
states
that
his
wife,
in
1978
and
1979,
began
attending
a
psychiatrist
for
treatment
as
she
stated
to
him
that
she
was
suffering
"from
some
longstanding
emotional
problems
relating
to
her
childhood”.
His
wife
also
disclosed
to
him
that
she
had
a
number
of
adulterous
relationships
in
1979
with
her
psychiatrist,
in
1980
during
a
visit
to
California,
in
1981
with
a
Nick
Rogers
who
is
a
professor
of
history
at
York
University
and
one
other
affair
with
another
professor
at
York
University.
Although
Sadavoy
had,
on
numerous
occasions
during
the
trial,
mentioned
that
he
would
have
been
satisfied
with
joint
custody
and
equal
sharing
of
principal
residence,
this
is
contradicted
by
his
statements
in
paragraphs
28,
29
and
30
of
his
affidavit,
Tab
12,
Exhibit
P-1.
28.
Although
my
wife
and
I
have
discussed
the
possibilities
of
joint
custody
of
the
children,
I
have
not
been
able
to
come
to
grips
with
such
an
arrangement.
As
a
result
of
the
separation,
I
have
sought
the
assistance
of
a
psychiatrist
in
order
to
assist
me
in
dealing
with
the
emotional
problems
resulting
from
the
separation.
On
August
28,
1981,
my
wife
refused
to
commit
herself
to
attending
with
me
for
separation
counselling.
My
wife’s
refusal
to
attend
for
any
counselling
is
of
extreme
concern
to
me
as
she
has
admitted
to
me
that
she
“still
has
some
unfinished
business
with
her
therapy".
I
understand
that
my
wife
was
referring
to
the
psychiatric
problems
which
caused
her
to
go
to
her
psychiatrist
in
1979
which
problems
are
still
present.
29.
Further,
I
do
not
believe
that
my
wife
and
I
can
effectively
communicate
with
each
other
in
order
to
realistically
effect
a
joint
custody
arrangement.
We
have
also
disagreed
as
to
where
the
children
would
have
their
principal
residence.
30.
Another
significant
reason
why
we
have
not
been
able
to
agree
on
joint
custody
is
because
of
the
difference
in
religious
beliefs
between
my
wife
and
myself.
My
wife
is
agnostic
and
Mr.
Rogers
and
his
daughter
are
Christians.
My
children
and
I
are
Jewish
and
I
intend
to
practise
Judaism
in
my
home
and
to
bring
the
children
up
according
to
the
tenets
of
the
Jewish
faith.
In
my
opinion,
religion
is
a
concept
which
binds
a
family
together
since
the
practice
of
religion
offers
a
common
bond
for
the
family.
In
my
view,
the
children
require
a
consistent
and
singular
religious
upbringing.
My
wife
has
now
indicated
to
me
that
the
children
can
be
brought
up
in
a
Jewish
manner
while
they
are
with
me
but
while
they
are
with
her,
they
will
not.
[Emphasis
is
mine.]
Sadavoy
also
believes
his
wife
to
be
unstable
and
"that
she
puts
her
own
gratification,
desires
and
passions
before
the
welfare
of
the
children"
(paragraph
35,
Tab
12,
Exhibit
P-1).
I
do
not
believe
it
necessary
to
review
each
paragraph
of
the
affidavit
of
Sadavoy.
Suffice
it
to
say
I
do
not
find
any
reference
to
the
issue
of
equality
nor
any
reference
to
the
issue
of
family
allowance.
I
do
find
many
reasons
why
Sadavoy
would
believe
he
should
want
sole
custody
of
his
children.
On
the
10th
day
of
September
1981,
Nicole
Sadavoy
filed
her
own
motion
requesting
an
order
granting
her
custody
of
the
two
children
born
of
the
marriage
(Tab
14,
Exhibit
P-1).
She
also
filed
an
affidavit,
Tab
15,
Exhibit
P-1,
indicating
the
reasons
for
wanting
custody.
Mrs.
Sadavoy's
boyfriend,
Mr.
Rogers,
also
filed
an
affidavit
in
support
of
Mrs.
Sadavoy's
motion.
Sadavoy
filed
a
supplementary
affidavit
on
or
about
September
16,
1981
in
reply
to
his
wife's
affidavit
and
in
reply
to
the
affidavit
of
Mr.
Rogers.
This
affidavit
(Tab
17,
Exhibit
P-1)
consists
of
31
paragraphs
in
which
he
answers,
in
detail,
the
allegations
made
in
his
wife's
affidavit.
Once
again,
as
in
Sadavoy's
first
affidavit,
Tab
12
Exhibit
P-1,
he
explains
why
he
should
be
granted
sole
custody
of
the
two
children.
No
mention
is
made
of
the
issue
of
family
allowance
nor
the
need
to
obtain
same.
Mrs.
Sadavoy
filed
an
affidavit
in
reply
(Tab
18,
Exhibit
P-1).
It
is
apparent
from
reading
the
affidavits
that
both
Sadavoy
and
his
wife
were
seriously
contesting
the
issue
of
custody
of
the
two
children,
not
the
issue
of
income
to
be
obtained
from
the
family
allowance
paid
by
the
Government
of
Canada.
On
September
17,
1981,
Master
Cork
of
the
Supreme
Court
of
Ontario
granted
interim
custody
of
the
two
children
to
Sadavoy.
If
Sadavoy's
only
interest
in
having
custody
of
his
children
was
to
obtain
"income"
by
receiving
the
family
allowance,
the
matter
should
have
ended
with
this
decision.
He
had
custody
and
as
he
states,
he
wrote
to
obtain
the
family
allowance.
But
it
did
not.
Mrs.
Sadavoy
filed
a
number
of
additional
motions,
one
of
which
was
to
define
her
access
rights
to
the
children
as
she
was
obviously
having
difficulty
in
being
with
her
children
as
often
as
she
desired.
If,
once
again,
Sadavoy
was
only
interested
in
the
income
from
the
family
allowance,
it
would
be
understandable
that
he
would
have
no
problem
in
agreeing
to
whatever
reasonable
access
rights
Mrs.
Sadavoy
requested.
This
did
not
happen.
Mr.
Sadavoy
contested
Mrs.
Sadavoy's
request
for
access.
In
his
affidavit
contesting
Mrs.
Sadavoy's
motion
for
access,
Mr.
Sadavoy
states
that
for
the
stability
and
security
of
the
children,
it
would
be
harmful
for
the
children
to
grant
the
access
that
his
wife
is
requesting
(Tab
31,
Exhibit
P-1).
In
paragraph
10
of
Tab
31,
Exhibit
P-1,
Sadavoy
states:
10.
My
wife's
proposals
for
access
would
result
in
the
children
being
with
her
for
six
days
every
fourteen
day
period.
I
believe
that
such
proposals
would
be
contrary
to
the
best
interests
of
the
children
and
contrary
to
the
reasons
of
Master
Cork
for
granting
me
interim
custody
of
the
children.
Once
the
children
have
had
an
opportunity
to
plant
their
roots
in
our
home,
I
would
have
no
objection
to
my
wife
having
the
children
one
day
of
the
week
on
an
overnight
basis.
However,
it
is
my
belief
that
it
is
premature
to
do
so
at
this
time.
I
am
prepared
to
agree
to
my
wife
exercising
access
on
alternating
weekends
and
to
visit
the
children
every
Wednesday
evening
provided
that
they
are
returned
to
me
by
8:00
p.m.
If
my
wife
wishes
to
visit
the
children
more
often
during
the
week,
or
even
on
the
non-access
weekend,
I
will
be
prepared
to
agree
to
the
same
provided
that
our
schedules
are
compatible.
I
am
not
trying
to
deprive
the
children
of
a
full
relationship
with
their
mother
but
rather
feel
that
at
this
difficult
stage
they
should
be
given
every
opportunity
to
develop
a
stable
routine.
I
do
not
feel
that
it
will
be
in
the
children's
best
interest
to
be
shifted
from
house
to
house
and
more
particularly
so
during
the
week
when
they
must
attend
school.
They
have
suffered
enough
changes
and
dislocations
in
the
past
few
months.
The
question
remains.
Why
is
Mr.
Sadavoy
contesting
the
issue
of
more
access
to
the
children
by
the
mother
if
his
only
interest
in
asking
for
custody
of
the
children
was
to
obtain
the
income
from
the
family
allowance?
I
never
received
a
valid
reply
from
defendant
nor
his
counsel.
Notwithstanding
the
self-serving
statement
of
Sadavoy
as
to
why
he
went
to
court
for
custody,
that
is,
only
to
obtain
the
income
from
the
family
allowance,
the
documentary
evidence
filed
by
the
plaintiff,
the
affidavits
of
Sadavoy,
clearly
indicate
to
me
that
the
prime
reason
the
legal
expenses
were
incurred
was
to
proceed
to
obtain
custody
of
his
two
children.
Legal
expenses
incurred
in
proceedings
for
divorce
or
for
custody
of
children
are
not
expenses
incurred
to
obtain
income.
These
expenses
are
purely
personal
expenses
and
cannot
be
deducted
as
expenses
in
virtue
of
paragraph
18(1)(h)
of
the
Income
Tax
Act.
Counsel
for
defendant
submits
that
the
family
allowance
payments
is
a
right
to
which
the
defendant
is
entitled
and
to
enforce
that
right
he
may
deduct
any
legal
expenses
incurred
to
enforce
that
right.
As
authority
for
this
principle,
counsel
submits
the
case
of
Gladys
(Geraldine)
Evans
v.
M.N.R.,
[1960]
C.T.C.
69;
60
D.T.C.
1047
(S.C.C.).
With
respect
to
this
submission,
I
do
not
agree
that
the
facts
in
the
Evans
case
have
any
application
to
the
present
factual
situation.
Evans
spent
about
$12,000
on
legal
fees
in
a
successful
attempt
to
convince
the
courts
that
she
was
entitled
to
an
annual
income
of
$25,000
for
life
from
her
late
father-in-law’s
estate.
The
judgment
ordered
the
trustees
of
her
late
father-in-law's
estate
to
pay
her
$25,000
per
year
as
income
from
the
estate.
Gladys
Evans'
right
to
the
income
derived
from
the
will.
The
legal
expenses
were
incurred
to
collect
the
income
to
which
she
was
entitled
and
which
was
being
wrongly
withheld
from
her.
In
the
present
case
there
was
no
decision
by
any
court
as
to
the
payment
of
the
family
allowance.
Sadavoy
did
not
incur
legal
expenses
in
proceeding
against
Health
and
Welfare
Canada
(Queen)
for
its
failure
to
pay
to
him
the
family
allowance
to
which
he
claimed
to
be
entitled.
The
expenses
were
incurred
to
obtain
custody
and
to
prevent
further
access.
The
Family
Allowance
Act,
1973,
subsection
7(1)
states
to
whom
the
allowance
is
payable.
7.
(1)
Where
payment
of
a
family
allowance
is
approved,
the
allowance
shall,
in
such
manner
and
at
such
times
as
are
prescribed,
be
paid
to
the
female
parent,
if
any,
or
to
such
parent
or
other
person
or
such
agency
as
is
authorized
by
or
pursuant
to
the
regulations
to
receive
it.
In
that
the
allowance
is
payable
to
the
female
parent,
in
order
for
the
male
parent
to
receive
payment
of
the
family
allowance
he
must
establish
a
new
right,
the
right
to
the
payment
in
virtue
of
paragraph
9(1)(b)
of
the
Regulations.
.
.
.
Where
payment
of
a
family
allowance
is
approved,
the
allowance
shall
be
paid
to
the
male
parent
where,
the
female
parent
and
male
parent
are
living
separate
and
apart
and
the
male
parent
has,
in
fact,
custody
of
the
child
.
.
.
The
expense
incurred
to
obtain
a
new
right
is
not
a
deductible
expense
under
paragraph
18(1)(b)
of
the
Income
Tax
Act
(The
Queen
v.
Burgess,
[1981]
C.T.C.
258;
81
D.T.C.
5192
(F.C.T.D.)).
I
am
satisfied
that
the
family
allowance
payable
to
the
female
parent,
to
the
male
parent
under
certain
circumstances,
is
not
income
from
business
or
from
property.
It
must
be
included
in
one's
income
in
virtue
of
subsection
56(5)
of
the
Income
Tax
Act
as
a
source
of
income
neither
emanating
from
a
business
or
property.
For
the
above
reasons,
plaintiff's
appeal
by
way
of
a
trial
de
novo
is
allowed.
Costs
are
to
be
awarded
to
the
defendant
in
accordance
with
subsection
178(2)
of
the
Income
Tax
Act.
Appeal
allowed.
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