Date: 20000607
Docket: 1999-2313-IT-I
BETWEEN:
DIANE GUILLEMETTE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered orally from the bench on May 18, 2000, at
Québec, Quebec, and edited at Ottawa, Ontario, on June 7,
2000)
Lamarre Proulx, J.T.C.C.
[1]
This is an appeal under the informal procedure for 1992, 1993 and
1994.
[2]
The issue for 1992 is whether the appellant must include in her
income the maintenance she received for her children.
[3]
The issue for 1993 and 1994 is whether payments made by the
appellant's former spouse to the appellant's children
were so made pursuant to a direction to pay from the appellant,
as the respondent claims. The appellant maintains that there was
no such direction to pay but merely acceptance of the
non-execution of the divorce judgment.
[4]
The facts taken into account by the Minister of National Revenue
("the Minister") in making his reassessments for
the years at issue are set out as follows in paragraph 9 of the
Reply to the Notice of Appeal ("the Reply"):
[TRANSLATION]
(a)
on April 29, 1991, the Honourable J.-Claude Larouche
rendered a divorce judgment and confirmed at the same time a
corollary relief agreement signed by the appellant and her former
spouse, Christian Lavoie, on April 19, 1991;
(b)
in the corollary relief agreement, Christian Lavoie undertook to
pay the appellant maintenance of $100 a week for the children,
the said maintenance being indexed;
(c)
two children were born of the parties' marriage:
(i)
Dany on November 12, 1973, and
(ii)
Nadine on May 28, 1976;
(d)
on May 15, 1996, the Honourable Mr. Justice Gratien Duchesne
confirmed an agreement entered into by the parties following a
motion to vary corollary relief brought by Christian Lavoie;
(e)
in the said agreement ratified on May 15, 1996, the parties
agreed as follows:
1. Mr. Lavoie and Ms. Guillemette agree that, given the
situation of their adult children, maintenance is no longer to be
paid to Ms. Guillemette for the children;
2. Ms. Guillemette consents to the cancellation of the arrears
of maintenance owed to her by Mr. Lavoie for the
children;
3. The parties accordingly agree that there are no arrears of
maintenance to be paid to Ms. Guillemette and that maintenance is
no longer to be paid to her for their adult children;
and the appellant thus waived payment of maintenance for her
children and of the arrears owed to her;
(f)
it was determined that amounts of $5,742, $5,840, $5,937 and
$1,254 were paid for the 1992, 1993, 1994 and 1995 taxation
years respectively;
(g)
it was at the appellant's request that Christian Lavoie paid
the maintenance directly to the children starting in 1993, the
appellant having exercised her discretion by favouring that
method of payment;
(h)
in view of the two agreements establishing that the maintenance
had to be paid to the appellant, which agreements were confirmed
by the Superior Court on April 29, 1991, and May 15, 1996, the
Minister is justified in including the amounts of $5,742, $5,840,
$5,937 and $1,254 in the appellant's income for the 1992,
1993, 1994 and 1995 taxation years respectively.
[5]
The relevant two paragraphs of the Notice of Appeal read as
follows:
[TRANSLATION]
This decision is unfair since all that is involved is a
father's moral obligation to his children and unbelievable
since the amounts were used solely to support our children,
especially given that my divorce led to serious financial
problems at the time.
As well, since he was afraid that the money would be used for
my benefit alone, their father quickly acceded to our request
that the money be paid into our children's respective bank
accounts starting in 1993. In addition, he stopped paying the
maintenance to our daughter Nadine in October 1994 and to our son
Dany in June 1995.
[6]
The appellant was the only person who testified. She explained
that her former spouse paid her maintenance for her children in
1992 but that the payments were often late and were difficult to
obtain. Her former spouse was always afraid that the money paid
would not be used by her for their children. Negotiations between
lawyers were often required in order to obtain payment so that,
in 1993, the appellant apparently suggested through her lawyer
that her former spouse pay the amounts directly to their
children. As far as she was concerned, this was not a direction
to pay but a change to the instructions in the judgment.
[7]
No evidence was adduced to the contrary.
[8]
The divorce judgment referred to in subparagraph 9(a) of the
Reply was filed as Exhibit I-2. Clause 6 of the corollary relief
agreement attached to that judgment reads as follows:
[TRANSLATION]
The respondent shall pay the applicant, solely for the
children, maintenance of $100 a week as provided for in the
corollary relief agreement, with indexation as provided for in
article 638. . . .
[9]
The judgment referred to in subparagraph 9(d) of the Reply was
filed as Exhibit I-3. The agreement between the parties is the
most important document in this case. I will quote a few of the
recitals and the parties' agreement:
[TRANSLATION]
WHEREAS in the agreement Mr. Lavoie undertook to pay Ms.
Guillemette maintenance of $100 a week for their children Dany
and Nadine, the said maintenance being indexed;
. . .
WHEREAS since 1993 Mr. Lavoie has paid each child $57.51
by putting the money directly into their respective bank
accounts;
WHEREAS, once he was informed that his adult children were
working, Mr. Lavoie stopped paying the maintenance, to his
daughter Nadine in April 1994, and to his son Dany in June
1995;
. . .
THE PARTIES AGREE AS FOLLOWS:
1.
Mr. Lavoie and Ms. Guillemette agree that, given the situation of
their adult children, maintenance is no longer to be paid to Ms.
Guillemette for the children;
2.
Ms. Guillemette consents to the cancellation of the arrears of
maintenance owed to her by Mr. Lavoie for the children;
3.
The parties accordingly agree that there are no arrears of
maintenance to be paid to Ms. Guillemette and that maintenance is
no longer to be paid to her for their adult children;
[10] Counsel
for the respondent, relying on the explanation given by the
appellant in her Notice of Appeal and the above-cited passages
from the agreement, argued that the appellant had made a
designation for payment. The appellant's position as regards
1993 and 1994 is set out in paragraph 6 of these Reasons. As
regards 1992, she argued that the amounts received were for her
children and not herself.
Conclusion
[11] With
respect to 1992, the Federal Court of Appeal held in
Danielle Serra and Denyse Hamer v. The Queen,
98 DTC 6602, that alimony paid to a former spouse for the
maintenance of children must be included in the recipient's
income in accordance with paragraph 56(1)(b),
(c) or (c.1) of the Act.
[12] With
respect to 1993 and 1994, it would be difficult for me to
conclude that the document referred to in paragraph 9 of these
Reasons implies that the appellant gave the payer a direction to
pay her children on her behalf. Thus, it should be noted that,
when the payer stops paying the maintenance to his children for
some reason, he does not start paying it to the appellant again.
Moreover, the agreement provides that the amounts the appellant
could claim as a creditor will not be claimed.
[13] Payment
is an important civil law concept in the area of obligations. It
would therefore have been helpful to know the respondent's
position in terms of the academic writing and the case law in
order to determine the circumstances in which a payment made to a
person other than the creditor is accepted as a genuine payment
made to the creditor by the debtor.
[14] In this
regard, I refer to Jean-Louis Baudouin and
Pierre-Gabriel Jobin, Les Obligations, 5th
edition, at pages 495, 498 and 515:
[TRANSLATION]
. . . In legal parlance, to pay means to perform an
obligation, whatever its nature. . . .
. . .
639 – Payment to creditor – To effect a
discharge, payment must be made to the creditor personally or to
someone designated to receive it on the creditor's behalf by
agreement (a mandatary or the beneficiary of a stipulation for
another), by law (tutor, curator) or the courts (trustee in
bankruptcy). When the debtor pays the creditor's contractual
representative, the debtor must be careful to make sure of the
person's capacity as representative, since a payment made to
an unauthorized third party is not binding on the creditor and
requires the debtor to pay again, except where the creditor has
subsequently ratified the act or benefited from the payment (for
example, where payment was made to the creditor's own
creditor on his or her behalf). Payment made to a third party
where there is no right to do so is in principle invalid, and an
action will lie for recovery of a thing not due.
. . .
Proof of Payment
670 – Burden of proof – Payment raises
problems with regard to the means of proof for demonstrating its
existence. In principle, the burden of proving payment is on the
debtor once the creditor has proved that a relationship of
obligation exists. However, the debtor cannot prove payment by
just any means but must comply with the rules of evidence
established by the Civil Code (art. 2803 et seq.
C.C.Q.)
671 – Written evidence – Since payment is
seen by most academic commentators and in most court decisions to
be a juridical act, it must, in principle, when the amount is
above a certain limit, be proved by a writing. Generally, the
writing is the receipt or acquittance issued by the creditor on
receiving payment. However, it may also consist of domestic
papers or a copy of the instrument of indebtedness that has
remained with the creditor and on which it is noted that payment
has been received. When the payment is lower than the amount
provided for in article 2862 C.C.Q. or when there is a
commencement of proof in writing, testimonial evidence is
allowed, provided, of course, that the best evidence rule be
complied with. The same is true when the debtor has been unable
to obtain written evidence or demonstrates that he or she cannot
produce the original of the writing despite his or her good faith
and diligence.
[15] According
to the above commentary, payment is to be made to the creditor
personally, and if it is made to third parties, definite proof
must be provided that the debtor was authorized to pay the third
parties rather than the creditor. I would therefore be inclined
to think that, if there is no concurrent evidence, whether
written or testimonial, from the two parties to the agreement
that the appellant's children were designated to receive
payment of the maintenance on her behalf, or if there is no
writing signed by the appellant designating her children to
receive payment of the maintenance on her behalf, there is no
designation for payment.
[16] Neither
the testimonial nor the documentary evidence leads me to conclude
that the children were so designated to receive the maintenance
payments on the appellant's behalf. There was certainly no
subsequent ratification either. It is my view that the evidence
in this case has shown that, as argued by the appellant, what was
involved was simply acceptance by her of the non-execution of the
divorce judgment of April 29, 1991.
[17] The
appeal is dismissed for 1992 and the appeals for 1993 and 1994
are allowed.
Signed at Ottawa, Canada, this 7th day of June 2000.
"Louise Lamarre Proulx"
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
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