[OFFICIAL ENGLISH TRANSLATION]
Date: 20001101
Docket: 1999-4221(IT)I
BETWEEN:
MARIO POISSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal for the 1997
taxation year.
[2] The question at issue is to
determine whether, in respect of the 1997 taxation year, the
amount of $5,200 paid by the appellant constituted a
deduction on account of support or other allowance payable on a
periodic basis.
[3] In support of the assessment that
is the subject of this appeal, the Minister of National Revenue
(the "Minister") assumed the following facts:
[TRANSLATION]
(a) the appellant
had deducted an amount of $5,200 as support or other
allowance payable on a periodic basis on the initial income tax
return filed for the 1997 taxation year;
(b) the Minister had
assessed the appellant's initial tax return as filed for the
taxation year at issue;
(c) the appellant
lived in a common-law relationship with Francine Boutin from 1984
to December 1993;
(d) the appellant
and Francine Boutin had a
child¾Valérie Boutin, born on July 2,
1984;
(e) the amounts paid
by the appellant to Francine Boutin were not paid under an
agreement or order of the Court;
(f) the amount
of $5,200 paid by the appellant to Francine Boutin was paid
voluntarily;
(g) consequently,
the Minister disallowed the deduction of $5,200 claimed as
support or other allowance payable on a periodic basis, in the
year at issue.
[4] The appellant admitted all the
facts assumed by the Minister with the exception of paragraphs
(e) and (f).
[5] The evidence showed that, in
separating by mutual consent, the appellant and his spouse had
reached an agreement stipulating as follows: (Exhibit A-1)
[TRANSLATION]
Procedure for meeting the
material needs of Valérie Boutin
At March 24, 1994, Mario Poisson and Francine Boutin agree
that, for the time being, no alimony will be paid to
Valérie Boutin.
. . .
The agreement is as follows:
Mario Poisson will support Valérie as Francine Boutin
requests and in accordance with the needs communicated by
Francine Boutin.
However, if a request for alimony is made in future by Francine
Boutin to meet the needs of Valérie, we agree that the
starting date for the alimony will become effective when a lawyer
is contacted to make a claim for alimony. No retroactive payments
may be sought for alimony in respect of the months preceding a
future request.
In no circumstances do we waive the possibility of making a
future claim for alimony.
. . .
[6] A number of years later, the
dispute between the appellant and his former spouse was the
subject of a judgment of the Superior Court of Quebec in which
the Honourable Judge Gaétan Pelletier decided the
following: (Exhibit A-2)
[TRANSLATION]
. . .
After his testimony, the parties agreed that Mr. Poisson's
projected income for 1999 would be $37,791, an amount that will
be the subject of an adjustment on May 15, 2000, that is, when
Mr. Poisson's income tax return and the financial statements of
his new company are filed.
In addition, the parties have agreed to exchange their income tax
returns as well as the financial statements of Mr. Poisson's
company no later than May 15 of each year.
FOR THESE REASONS, THE COURT:
GRANTS to the applicant, Francine Boutin, custody of the
minor child, Valérie;
ORDERS Mario Poisson to pay Francine Boutin for the minor
child, Valérie, $384.30 for support in two equal and
consecutive payments of $192.15 on the 16th and the last day
of each month, beginning on January 1, 1999;
ORDERS the parties to transmit to each other certified
true copies of their income tax returns and, with respect to
Mario Poisson, the financial statements of his company no
later than May 15 of each year;
TAKES OFFICIAL NOTE of Francine Boutin's undertaking to
forward the cost of tuition fees for the child Valérie to
Mario Poisson;
THE WHOLE, with costs on a party and party basis.
. . .
[7] This dispute relates to and
involves the period between the agreement and the Pelletier
judgment. During this period, the appellant regularly and
continuously paid a monthly amount of $100 to his former spouse
for their child. Furthermore, the wife acknowledged that she had
received the amounts.
[8] The appellant stated that the
payment of these amounts resulted from long and difficult
discussions and negotiations at the end of which, according to
the appellant, it was agreed that it was deductible alimony. For
her part, the former spouse admitted the discussions but claimed
that it was not alimony but essentially a voluntary payment,
neither deductible nor taxable in her hands.
[9] It emerges from the evidence that
relations between the spouses were and are still very strained.
The appellant claimed, both at the hearing and in his Notice of
Appeal, that a written agreement had been completed but that he
had misplaced it. His former spouse argued that she had never
signed such a written agreement. The appellant then acknowledged
that perhaps it had never been in writing but vigorously
maintained that it existed as an oral agreement.
[10] The Tax Court of Canada is not a Court
whose mission it is to determine support. Its sole jurisdiction
in this matter is to determine how the amounts paid and payable
are to be assessed and characterized under the provisions of the
Income Tax Act (the "Act"). In other words, do the
payments meet the requirements established by the Act and
the case law to be considered as support (alimony) or periodic
payments?
[11] In the case at bar, it has been shown
that the appellant made the monthly payments regularly. Were
these payments made voluntarily or did they result from an
agreement?
[12] In light of the evidence, it does not
appear that the payments were made as a result of a written
agreement. There were negotiations, discussions and
representations, but the appellant and his former spouse do not
agree on the ultimate outcome of their discussion. The appellant
would like to have this Court interpret the evidence and make a
finding that confirms his appraisal of the matter.
[13] Section 56.1(1) of the Act reads
as follows:
56.1(1)
Support.
For the purposes of paragraph 56(1)(b) and subsection
118(5), where an order or agreement, or any variation thereof,
provides for the payment of an amount to a taxpayer or for the
benefit of the taxpayer, children in the taxpayer's custody
or both the taxpayer and those children, the amount or any part
thereof
(a) when
payable, is deemed to be payable to and receivable by the
taxpayer; and
(b) when
paid, is deemed to have been paid to and received by the
taxpayer.
. . .
[14] It is easy to understand the reason for
such requirements; indeed, it is easy to imagine how difficult,
if not impossible, it would be for Department of National Revenue
officials to make their assessments on the basis of the opinions
or interpretations of the interested parties. At the same time,
it would be just as difficult for the parties in question to
assert their respective rights, since the support debtors could
at any time, whenever they wanted to, discontinue payments and
argue that they had no obligation.
[15] The requirement for an agreement or a
judgment is essential and fundamental.
[16] In the case at bar, the evidence did
not disclose that there was such an agreement, and therefore the
appeal must be dismissed.
Signed at Ottawa, Canada, this 1st day of November 2000.
J.T.C.C.
Translation certified true
on this 22rd day of September 2003.
Sophie Debbané, Revisor
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