Bell
J.T.C.C.:—This
case
was
heard
under
the
informal
procedure
of
the
Court
in
respect
of
the
1990
and
1991
taxation
years.
The
issue
is
whether
the
amounts
of
$600
per
month
paid
by
the
appellant
on
a
mortgage
in
relation
to
the
matrimonial
home
pursuant
to
a
written
separation
agreement
were
maintenance
payments
received
by
his
former
wife
and
deductible
by
him
by
virtue
of
the
provisions
of
paragraph
60(b)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
The
written
separation
agreement
dated
May
13,
1987,
provided
that
The
husband
covenants
and
agrees
that
he
shall
continue
to
pay
all
mortgage
payments
in
relation
to
the
matrimonial
home.
and
it
further
provides
that
The
wife
covenants
and
agrees
that
she
shall
adequately
provide
for
and
maintain
herself
without
assistance
or
contribution
from
the
husband
except
as
herein
provided.
The
wife
applied
to
the
Supreme
Court
of
British
Columbia
for
an
order
setting
aside
the
aforesaid
agreement.
The
reasons
for
judgment
in
that
action
contain
the
following
wording,
She
has
elected
to
live
at
Anmore
and
have
the
mortgage
payments,
made
by
the
respondent
considered
as
maintenance.
It
also
contains
the
following
words,
They
reached
an
agreement
that
the
petitioner
would
declare
$600
per
month
as
maintenance
on
her
income
tax
return
and
the
respondent
would
deduct
a
similar
amount
from
his
income
tax
return.
The
appellant
seeks,
on
the
basis
of
the
aforesaid
wording
in
the
reasons
for
judgment,
a
finding
by
this
Court
that
the
aforesaid
mortgage
payments
are
deductible
by
him.
The
respondent
took
the
position
that
subsection
60.1(1)
simply
deems
receipt
of
amounts.
The
pertinent
part
of
that
subsection
reads
as
follows:
where
.
.
.
a
.
.
.
written
agreement
described
in
paragraph
60(b)
.
.
.
has
been
made
providing
for
the
periodic
payment
of
an
amount
by
a
taxpayer
.
.
.
to
a
person
who
is
.
.
.
the
taxpayer's
spouse
or
former
spouse
.
.
.
for
the
benefit
of
the
person
.
.
.
the
amount.
.
.
when
paid,
should
be
deemed,
for
the
purposes
of
paragraphs
60(b)
.
.
.
to
have
been
paid
to
and
received
by
that
person.
Paragraph
60(b)
provided
that
there
may
be
deducted
in
computing
a
taxpayer's
income
for
a
taxation
year
an
amount
paid
by
the
taxpayer
in
the
year,
pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
agreement,
as
alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof
.
.
.
.
Respondent's
counsel
stated
that
the
mortgage
payments
were
not
alimony
because
they
did
not
have
the
characteristic
of
benefiting
or
supporting
the
recipient.
She
submitted
further
that
the
mortgage
payments
did
not
constitute
an
“allowance”
because
subsection
56(12)
provides
for
the
purposes
of
paragraph
60(b)
that
"allowance"
does
not
include
any
amount
that
is
received
by
a
person
unless
that
person
has
discretion
as
to
the
use
of
the
amount.
She
then
referred
to
the
case
of
The
Queen
v.
Bryce,
[1982]
C.T.C.
133,
82
D.T.C.
6126
in
which
the
Federal
Court
held
that
mortgage
payments
and
payments
for
certain
taxes
and
services
did
not
constitute
an
“allowance”
within
the
ambit
of
paragraph
60(b).
In
The
Queen
v.
Pascoe,
[1975]
C.T.C.
656,
75
D.T.C.
5427
the
Federal
Court
of
Appeal
said
that
an
allowance
in
their
view
was
a
limited
predetermined
sum
of
money
paid
to
enable
the
recipient
to
provide
for
certain
kinds
of
expense,
its
amount
being
determined
in
advance
and,
once
paid,
being
at
the
complete
disposition
of
the
recipient
who
is
not
required
to
account
for
it.
Specifically,
Pratte
J.,
said,
at
page
658
(5428):
.
.
.
a
payment
in
satisfaction
of
an
obligation
to
indemnify
or
reimburse
someone
or
to
defray
his
or
her
actual
expenses
is
not
an
allowance;
it
is
not
a
sum
allowed
to
the
recipient
to
be
applied
in
his
or
her
discretion
to
certain
kinds
of
expense.
The
Supreme
Court
of
Canada,
in
Gagnon
v.
The
Queen,
[1986]
1
C.T.C.
410,
86
D.T.C.
6179
said,
at
page
416
(D.T.C.
6183):
What
matters
is
not
the
way
in
which
a
taxpayer
may
dispose
of,
or
be
required
to
dispose
of,
the
amount
he
receives,
but
rather
the
fact
of
whether
he
can
dispose
of
them
or
not.
and
at
page
417
(D.T.C.
6184):
.
.
.
for
an
amount
to
be
an
allowance
within
the
meaning
of
paragraph
60(b)
of
the
Income
Tax
Act,
the
recipient
must
be
able
to
dispose
of
it
completely
for
his
own
benefit,
regardless
of
the
restrictions
imposed
on
him
as
to
the
way
he
disposes
of
it
and
the
benefits
from
it.
I
agree
with
the
respondent's
position.
Further,
I
have
no
difficulty
rejecting
the
appellant’s
submission
that
the
above
quoted
words
from
the
reasons
for
judgment
of
the
Supreme
Court
of
British
Columbia
are
of
assistance
to
him
in
this
appeal.
Accordingly,
the
appeal
is
dismissed.
Appeal
dismissed.
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