Date: 20050516
Docket: A-483-04
Citation: 2005 FCA 191
CORAM: SEXTON J.A.
EVANS J.A.
PELLETIER J.A.
BETWEEN:
RHONDA COOMBES
Appellant
and
HER MAJESTY THE QUEEN
Respondent
Heard at Edmonton, Alberta, on May 16, 2005.
Judgment delivered at Edmonton, Alberta, on May 16, 2005.
REASONS FOR JUDGMENT BY: SEXTON J.A.
CONCURRED IN BY: EVANS J.A.
PELLETIER J.A.
Date: 20050516
Docket: A-483-04
Citation: 2005 FCA 191
CORAM: SEXTON J.A.
EVANS J.A.
PELLETIER J.A.
BETWEEN:
RHONDA COOMBES
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
SEXTON J.A.
[1] By a consent judgment dated April 9, 1996, the husband of the appellant became obligated to pay support for a child of the marriage in the sum of $400.00 per month, commencing on May 1, 1996, and continuing until November 1, 2000, and thereafter to pay $650.00 per month commencing on December 1, 2000, for as long as the child remained in attendance at a recognized and accredited institution.
[2] In her 2001 income tax return, the appellant did not include the support payments in income, because she believed that with the amendments to the Income Tax Act, (ITA) in 1997, she no longer had to include the support payments and her husband would no longer be able to claim a deduction for the payments. Specifically she understood that a "commencement day" had been created by reason of the increase in her support payments on December 1, 2000.
[3] The appellant relied on ss. 56.1(4)b(ii) and (iv) of the ITA, arguing that the Consent Judgment was varied after April 1997, by reason of the increase of the support payments on December 1, 2000.
Subsection 56.1(4)
"Commencement Day" at any time of an agreement or order means
(a) where the agreement or order is made after April 1997, the day it is made; and
(b) where the agreement or order is made before May 1997, the day, if any, that is after April 1997 and is the earliest of
(i) the day specified as the commencement day of the agreement or order by the payer and recipient under the agreement or order in a joint election filed with the Minister in prescribed form and manner.
(ii) where the agreement or order is varied after April 1997 to change the child support amounts payable to the recipient, the day on which the first payment of the varied amount is required to be made,
(iii) where a subsequent agreement or order is made after April 1997, the effect of which is to change the total child support amounts payable to the recipient by the payer, the commencement day of the first such subsequent agreement or order, and
(iv) the day specified in the agreement or order, or any variation thereof, as the commencement day of the agreement or order for the purpose of this Act.
[4] The Tax Court Judge dismissed the appeal by the applicant.
[5] On appeal, the appellant argued that by reason of the increase in the support payments on December 1, 2000, there was a variance of the terms of the Consent Order within the meaning of section 56.1(4)b(ii).
[6] I do not agree. Section 56.1(4)b(ii) refers to a variance in an "agreement or order". In the present case there was no variance to the order. The order remained the same after December 1, 2000, as before that date. The obligation to pay the increased support payments arose from the original Court order in 1996. Consequently it cannot be said that there was any variance of the Court order. See Kennedy v. Her Majesty the Queen 2004 FCA 437 at
para 13.
[7] The appellant also argued that the 1996 Consent Order, by incorporating the term for increase of support payments in December 2000, had specified a commencement day.
[8] However, section 56.1(4)b(iv) only came into force on April 25, 1997. Hence, the concept of having a "commencement day" specified in an order did not exist when the 1996 Order was made.
[9] Unlike in Dangerfield v. The Queen 2003 FCA 480, there was no evidence that the parties, in agreeing to the Consent Judgment, were aware of the future amendment to the Income Tax Act and were agreeing to the Consent Order with the intention that the amendment would apply, so that support payments would be tax free in the hands of the appellant.
[10] The appeal will therefore be dismissed.
"J. Edgar Sexton"
_____________________________
J.A.
"I agree."
Evans J.A.
"I agree."
Pelletier J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-483-04
APPEAL FROM A JUDGMENT OF THE TAX COURT OF CANADA DATED AUGUST 26, 2004, NO. 2004-2250(IT)I
STYLE OF CAUSE: RHONDA COOMBES v. HER MAJESTY THE QUEEN
PLACE OF HEARING: Edmonton, Alberta
DATE OF HEARING: May 16, 2005
REASONS FOR JUDGMENT BY: SEXTON J.A.
CONCURRED IN BY: EVANS J.A.
PELLETIER J.A.
APPEARANCES:
| Carman R. McNary
|
FOR THE APPELLANT
|
|
|
|
Fraser Milner Casgrain LLP
Edmonton, Alberta
|
|
John H. Sims, Deputy Attorney General of Canada
Ottawa, Ontario
|
|
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