Date: 20000731
Docket: 98-438-IT-I
BETWEEN:
CLAUDE BASQUE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor
Judgment
Garon, C.J.T.C.C.
[1]
This is an appeal from an assessment dated June 16, 1997,
issued under the Income Tax Act by the Minister of
National Revenue and concerning an amount of $6,808.13. The
assessment was issued against the appellant for failing to comply
with a requirement to pay dated January 27, 1997, with
respect to a tax liability of his ex-wife, Odette Bouchard.
The requirement to pay was for a maximum amount of $9,471.99 to
be paid by the appellant.
[2]
Paragraph 6 of the Reply to the Notice of Appeal sets out
the factual allegations on which the Minister of National Revenue
relied in support of his assessment. That paragraph reads as
follows:
[TRANSLATION]
6. In making assessment no. 02107 dated June 16,
1997, the Minister made, in particular, the following assumptions
of fact:
(a)
the appellant and Odette Bouchard (hereinafter the
"ex-wife") were married;
(b) the
appellant and his ex-wife separated a number of years ago and a
separation agreement was made;
(c)
under that agreement of January 1986, confirmed by a judgment
rendered on March 25, 1986, the appellant was required
inter alia to pay the expenses relating to the family home
to a maximum of $105 a week;
(d) it
was understood that this amount of $105 per week would be taxable
in the hands of the ex-wife and deductible by the appellant;
(e)
by that same agreement, the appellant undertook to:
(i) pay the taxes which his ex-wife would be required to pay on
the sum of $105 a week;
(ii) look after the preparation of his ex-wife's returns of
income and pay the cost thereof;
(f)
contrary to his undertaking to prepare his ex-wife's returns
of income, the appellant did nothing;
(g)
consequently, the Minister had to proceed on the basis of
information in hand provided by the ex-wife in issuing
assessments on May 30, 1995 for the 1990 to 1994 taxation
years;
(h) the
ex-wife forwarded the statement of tax payable to the appellant,
but he did not honour his undertakings;
(i)
on January 27, 1997, the Minister sent the appellant a
requirement to pay a maximum sum of $9,471.99;
(j)
the appellant failed to act on this requirement to pay;
(k) a
notice of assignment in the matter of the ex-wife's
bankruptcy was filed on February 21, 1997 and Samson
Bélair/Deloitte & Touche Inc. was appointed trustee of
the estate of Odette Bouchard (hereinafter the
"debtor");
(l)
on June 16, 1997, the Minister issued an assessment against
the appellant for failing to comply with the requirement to pay
of January 27, 1997;
(m) that
assessment applies to the tax payable on the amount of $105 a
week paid to the ex-wife, that is, the debtor, for the years
concerned.
[3]
Through his agent, the appellant admitted the allegations
appearing in subparagraphs (a), (b), (c), (d), (g),[1] (i), (k) and (l) of
paragraph 6 of the Reply to the Notice of Appeal.
Subparagraphs (e), (f), (h) and (j) were denied either
categorically or as worded. The appellant knew nothing of
subparagraph 6(m) of the Reply to the Notice of Appeal. The
appellant also admitted paragraph 7 of the Reply to the
Notice of Appeal, which reads as follows:
[TRANSLATION]
7.
At the objections stage, the appellant claimed that an agreement
signed by the appellant and his ex-wife on March 11 and 13,
1997 respectively and confirmed by a judgment dated
March 26, 1997 nullified everything that had been previously
provided for, including the amounts owed by the appellant to the
former spouse.
[4]
The appellant was the only witness in the instant case.
[5]
The appellant states that he has been separated from
Ms. Bouchard for more than 20 years. He referred to the
corollary relief order issued in 1986 and to the fact that, as a
result of that order, he was required to pay support of $162.00 a
week. In addition to this amount of $162.00, he paid $105.00 a
week to cover the expenses related to a house inhabited by
Ms. Bouchard. These two types of payments amounted to a
total of $267.00 a week.
[6]
The appellant states that, in 1985, he realized that his former
spouse was not including in her income the weekly support of
$267.00 which he paid to her, whereas he was deducting the total
of the amounts representing the weekly support of $162.00 in
computing his income. Following discussions between the appellant
and his ex-wife, they came to an agreement whereby he would pay
what he called [TRANSLATION] "the government costs" and
the related accounting expenses. Subsequently, the appellant
testified, he [TRANSLATION] "regularly gave amounts of money
during the year in the years that followed,[2] so that she would pay her
taxes".
[7]
The appellant was told that Ms. Bouchard had received a
notice from Revenue Canada informing her that she owed a certain
amount in income taxes. In that regard, Ms. Bouchard made
the following allegation in paragraph 10 of her application
to vary interim relief dated January 23, 1996:
[TRANSLATION]
10.
In July 1995, the applicant Odette Bouchard had to prepare
her returns of income for the years 1990 to 1994 after receiving
notices to that effect from both levels of government.
According to the appellant, he had already paid the amount of
tax that Ms. Bouchard was required to remit to Revenue
Canada. The appellant testified that, following the troubles
Ms. Bouchard had with the tax authorities, he agreed to pay
her $4,900.00 to release himself from all his previous
obligations toward her. However, he further stated under
cross-examination that he himself had written on the cheque for
$4,900.00 [TRANSLATION] "Buyback of 93 Tercel".[3] The $4,900.00 cheque in
question was made out to Samson Bélair Deloitte &
Touche Inc. and bears the date January 28, 1997.
[8]
The appellant stated that, from 1985 to 1994, he paid
Ms. Bouchard sums that amounted to $1,500.00 to $2,000.00,
and sometimes more, on an annual basis so that she could pay
[TRANSLATION] "her taxes". The weekly support of
$162.00 which the appellant paid to Ms. Bouchard was paid by
cheque, whereas the payments of $105.00 were used to pay expenses
relating to electricity and heating, to insurance and to certain
repairs to the house where Ms. Bouchard lived.
[9]
The agreement signed by the parties on January 29, 1986 and
February 17, 1986[4] (hereinafter the "agreement of February 17,
1986"), which had been reached between the appellant
(described as the applicant in the agreement) and
Ms. Bouchard (referred to as the respondent in that
document) was filed in evidence. It was confirmed by a Superior
Court judgment dated March 25, 1986. The payments the
appellant had to make under the agreement appear in
clauses 1, 2 and 3 thereof, which read as follows:
[TRANSLATION]
1.
The applicant shall pay the respondent support of $162.00 a week,
payable in advance on Thursday of each week at the
respondent's home;
2.
The applicant shall pay the respondent support to cover expenses
relating to the family home, that is, the hydro, heating, tax and
insurance bills and maintenance of the building;
The respondent may at any time require that the amounts allocated
for this purpose be paid directly to her to a maximum of $105.00
a week;
Should the respondent made this election, she shall pay the items
enumerated above relating to the family home;
3.
The applicant undertakes to pay the additional income tax which
the respondent will be required to pay as a result of the
increase in support hereunder provided for;
Furthermore, the applicant shall be responsible for the
preparation of the respondent's return of income and for the
costs thereof.
[10] As
alleged in subparagraph 6(k) of the Reply to the Notice of
Appeal, Ms. Bouchard assigned her property under the
Bankruptcy and Insolvency Act on February 21,
1997.
[11] The
evidence also showed that a Superior Court judgment dated
March 26, 1997 confirmed an agreement that the parties had
signed on March 11 and 13, 1997 respectively (hereinafter
the "agreement of March 13, 1997"), replacing the
agreement of February 17, 1986 referred to above. The
agreement of March 13, 1997 reads in part as
follows:
[TRANSLATION]
. . .
THE PARTIES AGREE AS FOLLOWS:
1.
The applicant shall have the exclusive right to reside in the
respondent's property at 1852 Rue Bourassa,
Jonquière;
2.
The respondent shall pay the applicant unindexed weekly support
of $162.00, payable in advance on Thursday of each week by bank
transfer;
3.
The respondent shall pay on the applicant's behalf, likewise
as support, the hydro, heating, tax and insurance bills related
to the property at 1852 Rue Bourassa in Jonquière and
whose total is evaluated at $105.00 per week;
4.
The parties acknowledge and specifically provide that the
payments made under paragraph 3 hereof are in respect of
support to provide for the applicant's needs, and that the
provisions of subsections 56.1(2) and 60.1(2) of the Income
Tax Act and their provincial equivalents apply to the said
payments, as it is the parties' wish that those payments be
deductible for the respondent and included in the applicant's
income;
5.
The respondent undertakes to reimburse the applicant, upon
receipt of the notice of assessment, for the additional tax that
she may be required to pay as a result of the respondent's
payment of support valued at $105.00 a week provided for in
paragraphs 3 and 4 hereof;
. . .
8.
As of March 1, 1999, the respondent will no longer be
required to pay support to the applicant;
. . .
11. In
addition, the respondent undertakes to pay Samson Bélair,
the trustee in the applicant's bankruptcy, the sum of
$4,900.00 on the applicant's behalf in final payment of a
1993 Toyota motor vehicle that the applicant owns, which will
enable her to keep it in her possession in future.
[12] A
discharge dated March 14, 1997, which does not appear to
have been forwarded to the appellant until December 19,
1997, was given to the appellant by Ms. Bouchard. That
discharge reads as follows:
[TRANSLATION]
Pursuant to the settlement reached between Claude Basque
and me, Odette Bouchard, which was signed on March 11
and 13, 1997, I declare that I give Claude Basque a complete
and final discharge with respect to all support arrears which may
be owed me as of March 14, 1997.
I also declare that I give Claude Basque a complete and
final discharge with respect to all reimbursements of additional
tax which Claude Basque undertook to pay me (as support)
based on an increase in support which he granted me. This
discharge applies to 1996 and previous years. For the years 1997
and following, the aforementioned agreement signed on
March 11 and 13, 1997 continues to apply.
[13] The
"Requirement to Pay" dated January 27, 1997 was
filed in evidence.
[14] During
the hearing, I asked counsel for the respondent to send me
written submissions on certain questions relating to this case.
Those submissions are set out in a letter from counsel for the
respondent dated September 17, 1998, which reads as
follows:
[TRANSLATION]
Please find hereunder our written submissions as requested by
Judge Garon at the hearing of last August 14 in the
case cited above.
The undersigned communicated with Réjean Bergeron,
trustee in the bankruptcy of Odette Bouchard,
Claude Basque's spouse. Mr. Bergeron works at the
offices of Samson Bélair Deloitte et Touche Inc. He sent
me a list of the assets and liabilities reported at the time of
the assignment of Ms. Bouchard's property. Her
liabilities consist mainly of tax liabilities, namely $9,500.00
owed to Revenu Québec and $9,472.00 owed to Revenue
Canada. We produce the list of assets and liabilities in support
hereof.
The copy of the cheque for $4,900.00 to the order of Samson
Bélair Deloitte et Touche Inc., which was filed in
evidence as Exhibit A-3, represents the balance of the
car loan which Ms. Bouchard owed at the time her property
was assigned. The payment of that amount by Mr. Basque
enabled Ms. Bouchard to keep her Toyota motor vehicle. At no
time was that amount used to discharge the tax liability.
The undersigned also communicated with Mr. Basque's
spouse, Odette Bouchard, who stated that she had never
received from Mr. Basque any cash amount that was to be used
to pay the tax payable on the support. She confirmed that the
amount of $4,900.00 paid to the trustee in bankruptcy was used
solely for the purchase of her motor vehicle. An affidavit from
Odette Bouchard attesting to these facts is also filed in
support hereof.
Lastly, the undersigned reached Marc Boulanger, counsel
for Odette Bouchard in her divorce proceedings. He did not
know of the existence of the document filed in evidence as
Exhibit A-8. That document is a discharge given to
Mr. Basque for support arrears claimed by Ms. Bouchard
in the context of her divorce proceedings. Mr. Boulanger was
never even consulted at the time the said discharge was prepared
and signed by his client.
In view of the foregoing, the respondent is justified in
asking this Court to reopen the hearing. In the alternative, and
failing authorization for the reopening of the hearing, the
respondent asks that the appeal be dismissed.
[15] The reply
of the appellant's agent to counsel for the respondent's
letter is set out in a letter of September 30, 1998, which
reads as follows:
[TRANSLATION]
Please find hereunder our comments on the letter of
September 17, 1998 forwarded by
Anne-Marie Desgens.
We have no comment to make on the second or third paragraphs
of Ms. Desgens's letter since they in no way contradict
Mr. Basque's testimony given at the hearing of
August 14, 1998.
We object totally to the content of the fourth paragraph as it
is utterly inadmissible in evidence under the legal rule which
states that no testimony is admissible to contradict a valid
writing.
The document filed as Exhibit A-8 was duly and
freely signed by Ms. Bouchard and an attempt is now being
made to violate legal rules by producing an affidavit stating the
contrary.
Furthermore, the fact that Marc Boulanger, counsel for
Odette Bouchard, did not know of the existence of the
document filed as Exhibit A-8 in no way alters the
quality of that valid writing.
Accordingly, Ms. Desgens's claims in requesting a
reopening of the hearing are utterly without foundation as they
are based on an affidavit that is inadmissible in evidence and
which the Court must necessarily disregard, and since the other
facts alleged in relation to the trustee are totally irrelevant
to the instant case in which the question is still, "Did
Mr. Basque owe Ms. Bouchard money when he was served
with a garnishment notice?"
In our view, the evidence duly adduced before this honourable
Court shows that Mr. Basque owed Ms. Bouchard nothing
on the date of service of the garnishment notice since
Ms. Desgens was unable to prove the contrary, and the motion
for reopening of the hearing must accordingly be denied and the
appeal allowed.
Analysis
General comments
[16] It can be
seen from the foregoing that the assessment of June 16, 1997
is directly related to the requirement to pay of January 27,
1997.
[17] The
requirement to pay of January 27, 1997 concerning the tax
debtor Ms. Bouchard and addressed to the appellant reads in
part as follows:
[TRANSLATION]
You are hereby required to pay to the Receiver General on
account of the above-named tax debtor's liability under one
or more of the Acts cited below,
(1) forthwith, the moneys otherwise and immediately payable to
the tax debtor which you are liable to pay,
(2) all other moneys otherwise payable to the tax debtor which
you will be, within one year, liable to pay, as and when the
moneys become payable,
(3) where the moneys referred to in (1) and (2) include
interest, rent, remuneration, a dividend, an annuity or other
periodic payment, all such payments to be made by you to the tax
debtor (at any time during or after the one-year period)
until the liability is satisfied, and
. . .
but do not pay hereunder more than $9,471.99
(the maximum payable), 100% of the amount by which the total of
the weekly payment exceeds $162.00.
[18] This
requirement to pay was issued under subsection 224(1) of the
Income Tax Act (the "Act"), which reads
as follows:
Where the Minister has knowledge or suspects that a person is,
or will be within one year, liable to make a payment to another
person who is liable to make a payment under this Act (in this
subsection and subsections (1.1) and (3) referred to as the
"tax debtor"), the Minister may in writing require the
person to pay forthwith, where the moneys are immediately
payable, and in any other case as and when the moneys become
payable, the moneys otherwise payable to the tax debtor in whole
or in part to the Receiver General on account of the tax
debtor's liability under this Act.
[19]
Subsection 224(3) of the Act states in particular the
temporal scope of a requirement to pay in respect of periodic
payments issued under section 224 of the Act.
Subsection 224(3) provides as follows:
Where the Minister has, under this section, required a person
to pay to the Receiver General on account of a liability under
this Act of a tax debtor moneys otherwise payable by the person
to the tax debtor as interest, rent, remuneration, a dividend, an
annuity or other periodic payment, the requirement applies to all
such payments to be made by the person to the tax debtor until
the liability under this Act is satisfied and operates to require
payments to the Receiver General out of each such payment of such
amount as is stipulated by the Minister in the requirement.
[20] The power
to make an assessment in respect of a person who has failed to
comply with a requirement to pay issued under section 224 of
the Income Tax Act is conferred on the Minister of
National Revenue by subsection 227(10) of the Income Tax
Act.
[21] The
appellant did not dispute the fact that the requirement to pay
was sent to the appellant on January 27, 1997, as alleged in
subparagraph 6(i) of the Reply to the Notice of Appeal.
Under subsection 248(7) of the Income Tax Act, this
requirement, sent by priority post, is deemed to have been
received on the day it was mailed, in this case on
January 27, 1997.
[22] I must
therefore determine whether, when the requirement to pay was
communicated on January 27, 1997 and during the period
ending on the day of the assessment under appeal, that is,
June 16, 1997 (hereinafter the "period in issue"),
the appellant was required to make a payment or payments to
another person, in the instant case Ms. Bouchard, who is the
tax debtor under the Income Tax Act.
[23] It was
not claimed on behalf of the appellant that Ms. Bouchard was
not a tax debtor within the meaning of section 224 of the
Income Tax Act. Ms. Bouchard's indebtedness when
the requirement to pay was communicated amounted, according to
that requirement, to $9,471.99.
Agreement of February 17, 1986
[24] When the
requirement to pay was communicated on January 27, 1997, the
appellant was required to make certain payments to
Ms. Bouchard in accordance with the agreement of
February 17, 1986, confirmed, as noted above, by the
Superior Court on March 25 of that year.
[25] The
appellant was required to make weekly payments of $162.00 under
clause 1 of the agreement of February 17, 1986,
payments to a maximum of $105.00 under clause 2 of that
agreement and payments of an unspecified amount under
clause 3 of that same agreement.
[26] The
respondent admitted in a letter to the Court dated
September 24, 1999, sent in response to a request for
clarification by the Court, that the assessment under appeal did
not concern the amounts that the appellant was required to pay
under clauses 1 and 2 of the agreement of February 17,
1986. In that regard, I refer to the following passages from that
letter:
[TRANSLATION]
2)
The total of the amounts which the appellant was required
to pay to Odette Bouchard from the day on which the
requirement to pay was communicated (January 27, 1997) until
June 16, 1997, when the Minister of National Revenue made
the assessment in issue.
1)
Under paragraph 1 of the agreement of February 17,
1986, confirmed by the Superior Court on March 25, 1986, the
appellant was required to pay Odette Bouchard $162 each
week. However, that amount is not concerned by the requirement to
pay since it says "do not pay hereunder more than $9,470.99
(the maximum payable), 100% of the amount by which the total of
the weekly payment exceeds $162."
2)
Under paragraph 2 of that same agreement of
February 17, 1986, the appellant was also required to pay
the expenses relating to the family home. Although it is therein
stated that: "The applicant shall pay to the
respondent . . .", it is plausible that the
parties might have wished to say that Mr. Basque was to pay
the expenses relating to the residence to third parties for
Odette Bouchard's benefit since the second part of that
paragraph provides that Ms. Bouchard could require that the
amounts be paid directly to her.
At any event, the assessment in issue does not concern those
amounts.
[27] According
to the letter of September 24, 1999 from counsel for the
respondent, the assessment under appeal concerns only the amounts
payable by the appellant under clause 3 of the agreement of
February 17, 1986, which for convenience I reproduce
again:
3.
The applicant undertakes to pay the additional income tax which
the respondent will be required to pay as a result of the
increase in support hereunder provided for;
Furthermore, the applicant shall be responsible for the
preparation of the respondent's return of income and for the
costs thereof.
[28] The
respondent clearly confirmed in the letter just referred to that
the assessment concerned only the amounts payable under the
above-cited clause 3 of the agreement of February 17,
1986.
[29] That
agreement, which was confirmed on March 25, 1986, was
replaced by the agreement of March 13, 1997, which was
confirmed by a judgment of March 26, 1997, as stated above.
The agreement of February 17, 1986 thus applies to the
portion of the period in issue from January 27 to
March 26, 1997, whereas the agreement of March 13, 1997
is applicable from March 26 to June 16, 1997, the date
of the assessment under appeal.
[30] With
respect to the agreement of February 17, 1986, the question
thus arises as to whether the appellant, on January 27,
1997, owed amounts that were payable to his ex-wife under
clause 3 of that agreement. In other words, as of
January 27, 1997, were there any arrears with respect to the
payments provided for by that clause? In that regard, the
appellant stated categorically that he had made the payments
required under that clause. The respondent, for her part, replied
as follows in the aforementioned letter of September 24,
1999:
[TRANSLATION]
On May 30, 1995, the Minister of National Revenue made
assessments in respect of Odette Bouchard for her 1990,
1991, 1992, 1993 and 1994 taxation years (subparagraph 6(g)
of the reply to the notice of appeal, "admitted").
Consequently, as of May 30, 1995, the appellant was required
to pay Odette Bouchard the additional taxes resulting from
the addition to her income of the amount of $105 a week in 1990,
1991, 1992, 1993 and 1994.
On January 27, 1997, the date on which the appellant is
deemed to have received the requirement to pay, the appellant was
required to pay Odette Bouchard the additional tax resulting
from the addition to her income of the amount of $105 a week in
1990, 1991, 1992, 1993 and 1994. Starting on January 27,
1997, the appellant failed to comply with the requirement to
pay.
[31] First of
all, clause 3 of the agreement of February 17, 1986
does not state when the appellant was required to pay this
additional tax. I also note that there is no assumption in the
Reply to the Notice of Appeal, and in paragraph 6 thereof in
particular, that the appellant owed Ms. Bouchard any amount
payable under clause 3 of the agreement of February 17,
1986. In any case, the appellant's uncontradicted testimony
is clear to the effect that he owed Ms. Bouchard nothing on
January 27, 1997. Furthermore, it was not shown that the
appellant was required to make payments to Ms. Bouchard
under clause 3 of the aforementioned agreement during the
two-month period in question, that is to say, from
January 28 to March 26, 1997, in respect of the 1996
taxation year, for example, or any previous taxation year. Once
again, there was no assumption in that regard. I conclude from
the appellant's testimony that no amount was payable by the
appellant in respect of that period of nearly two months.
[32] In
assessing the whole of the evidence respecting the payments which
the appellant might have been required to make on
January 27, 1997 and afterwards, I note in particular that
Ms. Bouchard was not summoned as a witness by the
respondent. Her testimony could have shed some light on this
question. Having regard to all the circumstances, I accept the
appellant's version.
Payment of the $4,900.00 amount
[33] It was
not claimed for the respondent that the assessment concerned the
$4,900.00 payment which the appellant made on
Ms. Bouchard's behalf by cheque dated January 28,
1997 and written to the order of Samson Bélair Deloitte
& Touche Inc., the trustee in Ms. Bouchard's
bankruptcy. Clause 11—cited above—of the
agreement of March 13, 1997 refers to the appellant's
obligation to make this $4,900.00 payment. The purpose of the
payment is described in the same clause. I therefore do not have
to determine whether the payment should have been made to the
Government of Canada following the requirement to pay of
January 27, 1997.
Agreement of March 13, 1997
[34] With
regard to the period commencing on March 26, 1997 and
ending the day the assessment was issued, on June 16, 1997,
I turn now to the agreement of March 13, 1997, which was
approved by the court on March 26, 1997.
[35] Under
clause 2 of the agreement of March 13, 1997, the
appellant ("the respondent" in that agreement) was
required to pay Ms. Bouchard ("the applicant" in
that agreement) an unindexed weekly amount of $162.00.
Clause 3 of that same agreement further required the
appellant to pay $105.00 on Ms. Bouchard's behalf in
respect of certain expenses relating to the property inhabited by
Ms. Bouchard. Clause 3 did not require the appellant to
make payments directly to her.
[36]
Clause 5 of the agreement of March 26, 1997 provided
that the appellant was to reimburse Ms. Bouchard for the
additional tax arising from the inclusion in her income of the
amounts referred to in clauses 3 and 4 of that agreement, as
appears from the text below:
[TRANSLATION]
The respondent undertakes to reimburse the applicant, upon
receipt of the notice of assessment, for the additional tax that
she may be required to pay as a result of the respondent's
payment of support valued at $105.00 a week provided for in
paragraphs 3 and 4 hereof.
[37] The
evidence does not show whether the appellant was required to pay
any amounts to Ms. Bouchard under clause 5 of the
agreement at any time during the portion of the period in issue
to which the agreement of March 13, 1997, confirmed by the
Superior Court on March 26, 1997, applies, that is to say,
from March 26 to June 16, 1997.
[38] I would
note that counsel for the respondent makes no reference to the
agreement of March 13, 1997 in her letter of
September 24, 1999. Paragraph 6 of the Reply to the
Notice of Appeal, which contains the allegations of fact or
assumptions in support of the Minister of National Revenue's
assessment, contains no express reference to the agreement of
March 13, 1997. Subparagraph 6(m) of the Reply to the
Notice of Appeal does not appear to refer even implicitly to the
agreement of March 13, 1997. In paragraph 8 of that
pleading, the respondent refers to the agreement of
March 13, 1997, confirmed by a judgment of March 26,
1997 and the Minister of National Revenue makes the following
comments on that judgment:
[TRANSLATION]
8.
Upon review of that judgment, the Minister noted:
(a)
that the judgment did not state that the appellant had no further
payments to make, that is to say, that the amounts owed were
cancelled;
(b) that
that new judgment concerned provisions subsequent to the period
concerned by our requirement to pay of January 27, 1997;
and
(c)
that, as the said judgment is not retroactive, the Minister had a
duty to consider the agreement existing at the time of the
requirement to pay, that is, the agreement of January 1986.
[39] The
assessment under appeal thus did not include the amounts which
the appellant had to pay under clause 5 of the agreement of
March 13, 1997. In addition, in subparagraph 8(c) of
the Reply to the Notice of Appeal, the respondent asserts that
the Minister "had a duty to consider the agreement existing
at the time of the requirement to pay, that is, the agreement of
January 1986" described in these reasons as the agreement of
February 17, 1986. The respondent appears to be suggesting
that this agreement is the only one that should be considered for
the purposes of the instant case. Furthermore, in light of the
appellant's testimony, it was not shown on a preponderance of
evidence that the appellant was required to make payments to
Ms. Bouchard under the agreement of March 13, 1997
during the period from March 26 to June 16, 1997. As
noted above, the Court did not have the benefit of hearing
Ms. Bouchard's testimony.
Discharge
[40] The
discharge of March 14, 1997 must now be considered. It
should be noted in passing that the judgment confirming the
agreement of March 13, 1997 was rendered after the
discharge of March 14, 1997 as it is dated
March 26, 1997. This discharge concerns only two
subjects, which are described in the two paragraphs below:
[TRANSLATION]
Pursuant to the settlement reached between Claude Basque
and me, Odette Bouchard, which was signed on March 11
and 13, 1997, I declare that I give Claude Basque a complete
and final discharge with respect to all support arrears which may
be owed me as of March 14, 1997.
I also declare that I give Claude Basque a complete and
final discharge with respect to all reimbursements of additional
tax which Claude Basque undertook to pay me (as support)
based on an increase in support which he granted me for 1996 and
previous years. For the years 1997 and following, the
aforementioned agreement signed on March 11 and 13, 1997
continues to apply.
Signed at Jonquière,
this 14th day of March 1997
(Signed)
Odette Bouchard
[41] This
discharge can have effect only as of its date, March 14,
1997. It follows that, if the appellant was required to make
payments to Ms. Bouchard after January 26, 1997 and
prior to March 14, 1997, he was obliged to comply with the
requirement to pay of January 27, 1997 and had to make the
required payments to the Government of Canada. According to its
own terms, this discharge did not have retroactive effect and in
any case could not take precedence over the requirement to pay.
As to the period commencing on March 14, 1997 and ending on
June 16, 1997, the date of the assessment here in issue,
this discharge can have no effect since it expressly states that
"For the years 1997 and following, the aforementioned
agreement signed on March 11 and 13, 1997 continues to
apply." In short, the discharge of March 14, 1997 has
no effect on the requirement to pay or on the assessment in issue
before this Court.
General conclusion
[42] I have
concluded from the foregoing remarks that the appellant was not
required to make any payments to Ms. Bouchard, the tax
debtor, at any time during the period in issue, that is, from
January 27 to June 16, 1997. This conclusion applies
both to the payments referred to in clause 3 of the
agreement of February 17, 1986 and to those required by
clause 5 of the agreement of March 13, 1997. It is
clear from counsel for the respondent's submissions that the
assessment under appeal did not concern the payments provided for
by other clauses in the agreements of February 17, 1986 and
March 13, 1997. I therefore do not have to decide whether
the payments which the appellant was required to make under such
other clauses of the two agreements should have been taken into
account when the assessment of June 16, 1997 was made.
[43] For these
reasons, the appeal is allowed and the assessment of
June 16, 1997 is vacated. Under subsection 12(3) of the
Tax Court of Canada Rules (Informal Procedure), the
appellant is entitled to such disbursements as were essential for
the conduct of the appeal which he has made or is liable for.
Signed at Ottawa, Canada, this 31st day of July 2000.
"Alban Garon"
C.J.T.C.C.
Translation certified true on this 10th day of October
2001.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
20000731
98-438(IT)I
BETWEEN:
CLAUDE BASQUE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on August 14, 1998, at Chicoutimi,
Quebec, followed by a reopening of the hearing and communications
by the parties during 1999, by
the Honourable Chief Judge Alban Garon
Appearances
Agent for the
Appellant:
Robert Dion
Counsel for the
Respondent:
Anne-Marie Boutin
JUDGMENT
The
appeal from the assessment made under the Income Tax Act,
notice of which is dated June 16, 1997, is allowed and the
assessment of June 16, 1997, is vacated in accordance with
the attached Reasons for Judgment. Under subsection 12(3)
of the Tax Court of Canada Rules (Informal Procedure), the
appellant is entitled to such disbursements as were essential for
the conduct of the appeal which he has made or is liable for.
Signed at Ottawa, Canada, this 31st day of July 2000.
C.J.T.C.C.
Translation certified true
on this 10th day of October 2001.
Erich Klein, Revisor
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