Yourkin v. The Queen, 2003 TCC 958 (Informal Procedure)

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Appeal heard on December 3, 2003, at Toronto, Ontario.

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JUDGMENT

          The appeal from the assessment made under the Income Tax Act for the 2001 taxation year is dismissed.

Signed at Ottawa, Canada, this 30th day of December, 2003.

McArthur J.

REASONS FOR JUDGMENT

McArthur J.

[1]      The issue is whether the Appellant is entitled to spousal support payment as a deduction in computing his 2001 taxable income.

[2]      For the most, the facts are not in dispute. The Appellant and his former spouse Phyllis Yourkin, were separated in August 1994. From May 1995, the Appellant's employer, Lever Brothers Limited, deducted $1,500 per month from the Appellant's pay checks for spousal support. An equalization of net family property was implemented by Judgment of the Ontario Court (General Division) on January 13, 1997. In the Judgment, the family property included the Appellant's entitlement to a Unilever Canada Pension. Phyllis Yourkin was awarded 42.5% of the Appellant's pension. The Judgment relieved the Appellant from payment of spousal support after his retirement in January 1997. His former spouse received $13,191 annually directly from the Unilever Canada Pension, which was part of her division of the family property. The Appellant and Phyllis Yourkin were taxable on their respective amount. The Appellant did not pay tax on the $13,587 he was attempting to deduct.

[3]      Justice Walsh in his Judgment[1] relied on Minutes of Settlement[2] and ordered:

3.        THIS COURT ORDERS pursuant to the Family Law Act that spousal support shall be paid or payable on the following terms:

a.        Subject to what is set out below, the obligation of the defendant to pay to the plaintiff spousal support shall terminate as of January 1, 1997.

b.        The defendant is to provide forthwith to the plaintiff reasonable particulars of any further employment income to be received by him thereafter, and immediately on such notification, the plaintiff is to advise the defendant of all income being then received by her.

. . .

4.         THIS COURT ORDERS pursuant to the Family Law Act that the directions set out below are to be followed with respect to defendant's pension with Unilever Canada Pension Plan:

a.        The plaintiff shall be entitled to receive a share of all retirement benefits payable to the defendant under the Unilever Canada Pension Plan ("the pension plan") which is registered under the Ontario Pension Benefits Act registration No. C000322. Her share of the benefits, calculated as set out below, amounts to 42.5% of $29,362.58 per annum, or $1,039.92 per month.

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h.        The plaintiff shall indemnify the defendant and save him harmless from the tax liability attributable to her share of the pension and the benefits thereunder (or for the payment of the compensation equivalent to her share of the pension) and there shall at the request of either party be an accounting annually to determine the amount of tax paid by the defendant with respect to the plaintiff's share of the pension (or compensation payments) which amount shall be payable by the plaintiff to the defendant forthwith upon determination and notice to the plaintiff.

[4]      The Appellant's position is that the Judgment (Exhibit A-5) does not bind him because he did not sign it. It would appear to be signed for him by the solicitor acting on his behalf at that time. The Judgment is binding, I have no jurisdiction to find otherwise. The Appellant would have to make application to a court of competent jurisdiction to have it set aside. Further, the Appellant did not pay tax on the amount he wished to deduct.

[5]      In conclusion, the Appellant did not pay a support amount to his former spouse as no payments were made pursuant to an order of a competent tribunal, payable on a periodic basis for the maintenance of his former spouse, where the Appellant and his former spouse were living separate and apart within the meaning of subsection 56.1(4) of the Income Tax Act as required by subsection 60.1(2) and paragraph 60(b) of that Act.

[6]      The appeal is dismissed.

Signed at Ottawa, Canada, this 30th day of December, 2003.

McArthur, J.