Citation: 2006TCC167
Date: 20060316
Docket: 2005-3058(IT)I
BETWEEN:
DANIEL Y. ORSINI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-3092(IT)I
BETWEEN:
JO-ANN BATAH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Dussault J.
[1] These appeals were heard on common evidence under the Court's informal procedure.
[2] Mr. Orsini is appealing the assessments by which the Minister of National Revenue (the "Minister") disallowed the deduction of the amounts of $5,659 and $5,335 paid as support to his former spouse, Jo-Ann Batah, for 2002 and 2003 respectively.
[3] Ms. Batah is appealing the assessment by which the Minister added to her income the amount of $5,335 received as support from her former spouse for 2003.
[4] In Mr. Orsini's case, the assumptions of fact on which the Minister based his new assessments are stated in subparagraphs a) to f) of paragraph 12 of the Reply to the Notice of Appeal. These subparagraphs read as follows:
a) The Appellant and Mrs. Jo Ann Batah (hereinafter, the "former-spouse"[sic]) were married on the 22nd of August 1987;
b) The Appellant and his former-spouse [sic] had a child: Anthony, born on March 13, 1990 (hereinafter, the "child");
c) The Appellant and the former-spouse [sic] were divorced by judgment dated July 14, 1993;
d) According to the judgment mentioned in the preceding sub-paragraph [sic]:
(i) The custody of the child was granted to the former-spouse [sic] ;
(ii) The Appellant was ordered to pay the former-spouse [sic] for the maintenance of the child, an alimentary pension of $90 per week, following the date of the judgment;
e) According to a "Motion to vary accessory measures" dated January 24, 1997, a judgment of [the] Quebec Superior Court was rendered as follow [sic]:
(i) During summer holidays, between June 24th and August 30th, the Appellant was having the custody of the child;
(ii) The Appellant was ordered to pay fifty percent of the alimentary pension for the child, during the summer months;
f) By "Agreement" ratified by the Appeal Court of Quebec on November 23, 1998, the parties agreed to modify, in the following manner, the judgment rendered on January 24th, 1997;
(i) During the summer, between June 25th and August 27th, the parties agreed to share equally the time of [the] child, so that he [would] be one week with each parent alternately;
(ii) The alimentary pension for the child, had to be payable each and every week of the year.
[5] Mr. Orsini admitted all these subparagraphs.
[6] In Ms. Batah's case, the assumptions of fact on which the Minister based the assessment for 2003 are essentially the same as those on which Mr. Orsini's assessments were based, and Ms. Batah admitted them.
[7] It is important that certain facts be pointed out here.
[8] First, the January 24, 1997, judgment by James T. Kennedy J. of the Quebec Superior Court amended the July 14, 1993, judgment by Michel Côté J. and was declared executory notwithstanding appeal (Exhibit A-1, Tab C-1). Kennedy J.'s judgment stated that Mr. Orsini would have custody of the child during summer vacations, from June 24 to August 30, and that Ms. Batah would have during that period the same access rights as those Mr. Orsini had during the rest of the year. The judgment ordered Mr. Orsini to continue paying 50% of the support amount to Ms. Batah during the summer months to compensate for additional expenses she incurred.
[9] The judgment rendered by James T. Kennedy J. on January 24, 1997, was immediately appealed by Ms. Batah on February 19, 1997 (Exhibit A-1, Tab D-1). Subsequently, a motion to stay provisional execution was dismissed by Louise Mailhot J.A. of the Quebec Court of Appeal (Exhibit A-1, Tab D-2). In his testimony, Mr. Orsini stated that he had complied with the judgment of James T. Kennedy J. and thus paid reduced support during the summer of both 1997 and 1998.
[10] Following a mediation session held by Louise Otis J.A. of the Quebec Court of Appeal, Ms. Batah and Mr. Orsini signed an agreement on November 17, 1998, and this agreement was homologated and declared enforceable by a judgment of the Quebec Court of Appeal on November 23, 1998 (Exhibit A-1, Tab B-1).
[11] According to the terms of the agreement modifying the judgment rendered on January 24, 1997, by James T. Kennedy J., the parties agreed to share time spent with their son equally during the summer period, that is, between June 25 and August 27, alternating weekly. The agreement also stated that the child support amount, as set by the July 14, 1993, judgment, which amount was not being appealed, would be payable each and every week of the year.
[12] The November 23, 1998, decision by the Quebec Court of Appeal giving effect to the November 17, 1998, agreement between Ms. Batah and Mr. Orsini was rendered after April 1997, hence the commencement day is considered to be November 23, 1998, for the purposes of paragraph (a) of the definition of "commencement day" in subsection 56.1(4) of the Income Tax Act (the "Act"). Since it was the judgment of James T. Kennedy J. that had been in force until that date, since the amount of support payable by Mr. Orsini during the summer period under that judgment was only 50% of the amount he was to pay during the rest of the year, and since the November 17, 1998, agreement declared enforceable by the November 23, 1998, judgment amended the support amount payable by Mr. Orsini during the summer period as compared with what he had to pay according to the judgment of James T. Kennedy J., one can also conclude that there is a commencement day at the beginning of the 1999 summer period, under subparagraph (b)(ii) of the definition of "commencement day" in subsection 56.1(4) of the Act. Moreover, since the effect of the November 23, 1998, decision by the Quebec Court of Appeal was to change the total of the support amounts payable by Mr. Orsini to Ms. Batah for the 1999 summer period and the following summer periods, thus increasing the total amount of support payable yearly, the commencement day would be November 23, 1998, the date of the judgment, in accordance with subparagraph (b)(iii) of the definition of "commencement day" in subsection 56.1(4) of the Act. Finally, since under paragraph (b) of this definition the commencement day is the earliest of the days mentioned in subparagraphs (b)(i) to (b)(iv), November 23, 1998, must be considered to be the commencement day.
[13] Therefore, under both paragraph (a) and paragraph (b) of the definition, the commencement day is November 23, 1998.
[14] Where a child support amount is paid in accordance with an agreement or order having a commencement day after April 1997, the consequences are that the former spouse who is the recipient of the support so paid in the course of a year does not have to include any amount in income under paragraph 56(1)(b) of the Act and the former spouse required to pay child support cannot deduct under paragraph 60(b) of the Act the amount of such support paid during the year.
[15] In view of the above, Ms. Batah did not have to include in her income the amount of $5,335 received from Mr. Orsini in 2003 as support for their son Anthony and her appeal is therefore allowed.
[16] As for Mr. Orsini, the amounts of $5,659 and $5,335 paid to Ms. Batah as support for their son Anthony in 2002 and 2003 respectively are not deductible in the calculation of his income for those years and his appeals from the assessments for those years are accordingly dismissed.
Signed at Ottawa, Canada, this 16th day of March 2006.
"P. R. Dussault"
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