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Citation: 2005TCC18
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Date: 20050111
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Docket: 2004-2121(IT)I
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BETWEEN:
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DANIELLE DUBORD,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
BédardJ.
[1] The Appellant is appealing from
the reassessments dated August 29, 2003, for the 2000 and 2001
taxation years and from the reassessment dated October 2, 2003,
for the 2002 taxation year. In those assessments, the Minister of
National Revenue (the "Minister") included in the
Appellant's income support amounts that she received from her
former common-law spouse. Those amounts were $7,996 in 2000,
$8,196 in 2001 and $8,196 in 2002.
[2] The issue is whether the Appellant
received the support pursuant to a judgment rendered by the
Superior Court of Quebec on April 3, 1987, or pursuant to a
second judgment from the same Court dated October 11, 1988.
[3] Under paragraph 56(1)(c.1)
of the Income Tax Act (the "Act"), the support
payments received pursuant to an order made by a competent
tribunal after February 10, 1988, and before 1993 would be
taxable in computing the Appellant's income. However, the
payments received pursuant to an order made by a competent
tribunal before February 11, 1988, would be taxable only if the
payor and the recipient had made a choice to that effect, which
was not the case here.
[4] The two Superior Court judgments
in question were filed as Exhibits A-1 and A-4. An agreement
entered into between the Appellant and her former common-law
spouse on April 30, 1988, was also filed as Exhibit A-4.
[5] Under the first judgment, the
Appellant's former common-law spouse was required to pay the
Appellant support of $447.61 a month for his daughter for a
period of one year starting on November 1, 1986, and $385 a month
thereafter. The judgment also established the Appellant's
interim access rights with regard to his daughter.
[6] The second judgment confirmed an
agreement entered into between the Appellant and her former
spouse. The relevant part of the second judgment reads as
follows:
[translation]
CERTIFIES the agreement of the parties dated August 10, 1988,
RATIFIES and DECLARES IT BINDING to stand as if each of its
clauses were stated at length herein and ORDERS the parties to
comply therewith;
[7] The preamble to the agreement even
states the circumstances of the first judgment and the fact that
the parties had opted for conciliation and that they had come to
an agreement. For the most part, the stipulations of the
agreement concern the issue of the Appellant's former
common-law spouse's access to his daughter, but paragraph 2
provided that the Appellant would have custody of their daughter
and paragraph 5 stated that the former common-law spouse was to
pay the Appellant support of $385 a month.
[8] The Appellant submits that the
judgment of April 3, 1987, established her right to receive
support from her former spouse and also determined his visiting
and access rights with regard to his daughter. In her view, the
obligation established by the first judgment to pay support was
not amended by the second. She argues that the fact that the
preamble to the agreement of August 30, 1988, refers to her
former common-law spouse's existing support obligation and
the fact that the preamble was incorporated into the agreement
leads to the conclusion that the source of the obligation had not
changed, that that source was still the first judgment. The
Appellant claimed that the parties had agreed by the agreement of
August 30, 1988, to resolve only the question of visiting and
access rights. Counsel for the Respondent submits that the
judgment of October 11, 1988, established the former spouse's
obligation to pay the Appellant support and determined his
visiting and access rights with regard to his daughter. In his
view, the second judgment had the effect of entirely replacing
the first judgment of April 3, 1987, rather than making certain
amendments to it. It should be noted that the first judgment
provides that:
[translation]
. . . this order shall remain in effect until the parties have
come to an agreement amending the above terms and conditions. .
.
[9] Counsel for the Respondent
emphasized that the agreement of August 30, 1988, addressed the
question of the support that the former spouse must pay, and did
so not only in its preamble, but also in its very conditions.
[10] In fact, paragraph 5 states:
[translation]
The Respondent shall remit to the Applicant on the first day of
each month payments in the amount of $385 for the benefit and
support of his minor daughter Sarah, and that support shall be
indexed every year in accordance with the Act;
[11] Counsel for the Respondent referred to
this Court's decision in Hill v. The Queen, [1993]
T.C.J. No. 317, in which the Appellant objected to the inclusion
of certain amounts of support in her income. Until June 27, 1990,
the Appellant had received support of $225 a month, which was not
taxable. On June 27, 1990, a new order was made increasing the
support to $450 a month. The Court in that case had to decide
whether the new order of June 27 had the effect of eliminating
the entitlement to support that flowed from the previous orders
or whether it increased the amount payable without disturbing the
basic foundations of the previous orders.
[12] Rowe T.C.J., in Hill,
supra, held that since the Court rendered a new order
establishing payment of a certain amount, the entire amount was
payable pursuant to the new order, not only the portion
representing an increase in maintenance. The fact that an amount
was set in the new order had the effect of creating a new right
and obligation respecting the amount stated. A new order
concerning the same subject or matter as a previous order is
considered as having replaced the previous order and subsequently
becomes the legal basis of the obligation.
[13] Counsel for the Respondent also
referred to this Court's decision in Pierre Gagnon v. The
Queen, [2004] T.C.J. 551 (2002-2240(IT)I). In that case, the
Minister denied Mr. Gagnon (the former spouse of the Appellant in
the instant case) the deduction, in computing his income for the
1998, 1999 and 2000 taxation years, of the support amounts that
he paid to his former spouse (the Appellant in the instant case).
With essentially the same facts before him, Paris J. found
that the second judgment of the Superior Court represents a new
support order, even though the amount of the obligation remained
at the same level as previously. In his view, starting on October
11, 1988, support was paid pursuant to that judgment. He
added:
In my view, this finding also follows from the fact that the
parties to the agreement of August 30, 1988, exhaustively
addressed the questions of custody, access rights and support
instead of merely seeking amendments to the previous
judgment.
[14] For the same reasons as those set out
by Paris J. in Gagnon, supra, I find that the
second judgment of the Superior Court represents a new support
order and that, from October 11, 1988, support was paid pursuant
to that judgment and the monthly payments must therefore be
included in computing the Appellant's income as support
pursuant to paragraph 56(1)(b) of the Act for the years in
question.
[15] For all of those reasons, the appeals
are dismissed.
Signed at Ottawa, Canada, this 11th day of January 2005.
Bédard J.
Translation certified true
on this 8th day of April 2005
Aveta Graham, Translator
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