Lamarre
Proulx,
T.C.J.:—The
appellant
is
appealing
from
reassessments
by
the
respondent
M.N.R.
for
the
1985
and
1986
taxation
years.
The
point
at
issue
is
whether
the
payments
made
by
the
appellant's
ex-
husband
to
pay
household
expenses,
in
the
amount
of
$5,635
for
each
of
the
years
at
issue,
are
in
the
nature
either
of
alimony
or
an
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
appellant,
within
the
meaning
of
paragraph
56(1)(b)
of
the
Income
Tax
Act
(the
Act)
or
as
a
compensatory
allowance.
These
payments
were
made
pursuant
to
an
"agreement
on
corollary
relief”
which
was
approved
by
a
[TRANSLATION]
"Judgment
on
action
for
separation
from
bed
and
board”,
dated
November
22,
1984.
The
relevant
clauses
of
this
agreement
are
as
follows:
[TRANSLATION]
3.
The
defendant
shall
pay
the
plaintiff
alimony
of
$930.00
a
month;
4.
As
a
compensatory
allowance,
the
plaintiff
shall
have
for
herself
and
her
children
the
exclusive
use
of
the
defendant's
property
at
999
Des
Erables,
Val
D'Or
(lot
50-15,
Range
VII,
Dubuisson
Township)
until
March
1,
1990;
5.
Monthly
charges
for
electricity,
heating,
mortgage,
real
estate
taxes,
special
taxes
and
insurance
on
the
said
property
shall
be
paid
by
the
plaintiff;
6.
For
the
time
being,
however,
the
plaintiff
authorizes
the
defendant
to
pay
the
charges
mentioned
in
clause
5
of
this
agreement
from
the
alimony
of
$930.00,
up
to
a
maximum
monthly
amount
of
$505.00;
the
balance
of
$425.00
shall
be
paid
to
the
plaintiff
in
instalments
of
$106.25
a
week
at
her
residence.
The
grounds
of
appeal
are
as
follows;
[TRANSLATION]
1.
A
judgment
was
rendered
by
the
Superior
Court
for
the
district
of
Abitibi
in
separation
from
bed
and
board
on
November
22,
1984,
approving
the
agreement
determining
the
alimony
and
compensatory
allowance
to
Mrs.
Colette
Savard;
2.
A
divorce
decree
was
rendered
on
March
27,
1987
interpreting
and
clarifying
the
clauses
dealing
with
the
compensatory
allowance
and
the
alimony;
3.
In
the
divorce
decree
of
March
27,
1987
Claude
Larouche
J.
clearly
settled
at
page
7
of
the
said
judgment
that
the
alimony
would
be
$425.00
a
month
for
1985-86;
4.
In
the
same
decision
the
Court
in
fact
increased
the
alimony
from
$425.00
to
$525.00:
see
the
conclusion
of
that
judgment;
5.
It
is
clear
that
the
parties
had
asked
for
an
interpretation
of
clauses
3,
5
and
6
of
the
agreement
in
the
1984
judgment;
6.
It
is
clear
that
on
March
27,
1987
the
judge
ruled
in
favour
of
Colette
Savard,
clearly
indicating
that
the
respondent
Serge
Lacasse
was
responsible
for
the
amounts
relating
to
accommodation,
namely
$505.00
a
month
(see
page
6,
paragraph
2
of
the
said
judgment);
7.
The
Department
of
National
Revenue
accordingly
cannot
alter
the
interpretation
by
the
Court
and
must
correct
the
assessment
for
1985-86
by
removing
the
amount
of
$5,635.00
forming
part
of
Mrs.
Colette
Savard's
income;
8.
The
Department
of
National
Revenue
could
not
in
fact
include
in
our
client's
income
the
part
relating
to
accomodation,
which
was
paid
as
a
compensatory
allowance
and
not
as
alimony;
9.
The
only
taxable
amount
was
$425.00
a
month;
The
argument
made
by
counsel
for
the
appellant
is
that,
although
the
word
used
in
the
agreement
to
describe
all
the
money
received
by
the
appellant
under
this
agreement
is
“alimony”,
the
amount
received
by
the
appellant
in
fact
consisted
of
two
different
items.
One
is
in
the
nature
of
alimony
and
the
other
a
compensatory
allowance.
Thus
the
compensatory
allowance
is
not
a
payment
of
alimony
or
a
payment
for
the
maintenance
of
a
spouse
but
a
payment
made
to
pay
a
contribution
to
the
enrichment
of
the
spouse's
patrimony,
as
provided
in
article
459
of
the
Civil
Code
of
Québec,
which
reads
as
follows:
In
the
event
of
the
dissolution
or
annulment
of
the
marriage,
the
Court
may
award
to
either
spouse
or
to
the
surviving
spouse,
as
compensation
for
his
contribution
to
the
enrichment
of
the
patrimony
of
the
other,
a
right
of
ownership
or
habitation
of
the
immoveable
that
was
used
as
the
principal
family
residence
and
over
which
the
other
spouse
has
a
right
of
ownership.
In
the
event
of
separation
as
to
bed
and
board,
only
a
right
to
habitation
may
be
awarded.
This
argument
was
made
by
the
appellant
because
of
the
interpretation
given
by
the
Québec
Superior
Court
to
the
payments
in
question
in
a
divorce
decree
made
on
March
27,
1987.
It
is
useful
to
read
certain
passages
from
the
decree
nisi
(contested):
[TRANSLATION]
The
respondent
objects
to
the
corollary
relief,
but
his
objection
specifically
concerns
the
compensatory
allowance
which
allegedly
was
already
determined
by
an
earlier
judgment.
The
parties
are
now
making
different
and
contradictory
submissions
regarding
the
compensatory
allowance.
The
petitioner
wants
money
and
the
respondent
submits
that
this
question
was
dealt
with
by
granting
the
wife
a
right
of
habitation
of
the
marital
residence
until
1990.
The
difficulty
resulting
from
this
case
arises
from
the
wishes
of
the
parties
themselves.
They
committed
their
1984
agreement
to
writing
without
quantifying
the
actual
amount
of
the
compensatory
allowance.
They
so
bound
up
the
habitation
and
maintenance
for
one
party
that
they
cannot
now
be
readily
be
separated.
We
conclude
that
the
agreement
between
the
parties
resolves
their
dispute
as
to
the
compensatory
allowance.
This
means
a
right
of
habitation
with
the
expenses
paid
by
the
respondent.
[Emphasis
added.]
It
appears
from
this
judgment
that
it
is
the
husband
himself
who
argued
that
the
payments
made
for
the
household
were
in
the
nature
of
a
compensatory
allowance,
and
not
alimony.
The
Québec
Superior
Court
ruled
in
his
favour
when
it
concluded
that
the
right
of
habitation,
with
the
expenses
paid
by
the
ex-husband,
was
a
compensatory
allowance
and
the
amount
of
$925
was
not
entirely
alimony,
but
was
in
fact
made
up
of
two
parts,
alimony
and
the
compensatory
allowance.
I
feel
that
in
light
of
the
actual
wording
of
article
459
of
the
Civil
Code
of
Québec,
commentators
and
the
Superior
Court
judgment
I
have
to
conclude
that
the
compensatory
allowance
is
not
a
payment
made
for
the
maintenance
of
an
ex-spouse
but
one
made
to
repay
his
contribution
to
enriching
the
patrimony
of
the
spouse
making
the
payments.
It
is
a
payment
of
a
capital
nature,
and
not
income.
In
Gagnon
v.
The
Queen,
[1986]
1
S.C.R.
264;
[1986]
1
C.T.C.
410;
86
D.T.C.
6179,
the
Supreme
Court
of
Canada
held
that
payments
similar
to
those
under
consideration
were
payments
made
for
the
taxpayer's
maintenance.
However,
this
judgment
was
based
on
Civil
Code
provisions
prior
to
those
now
in
effect,
and
in
that
case
there
was
no
Superior
Court
judgment
interpreting
the
nature
of
these
payments.
The
taxation
years
at
issue
in
Gagnon
were
1974,1975
and
1976
and
the
obligation
to
pay
a
compensatory
allowance
has
been
in
effect
in
Quebec
since
December
1,
1982.
In
the
instant
case
a
Superior
Court
judge,
with
full
support
from
Québec
academic
opinion
and
judicial
precedent
in
analysing
the
nature
of
the
allowances
in
question,
has
distinguished
between
what
was
alimony
and
what
was
a
compensatory
allowance
in
the
payments
made
to
the
appellant.
When
a
Superior
Court
judge
makes
a
ruling
on
a
civil
law
provision,
I
see
no
reason
to
question
his
interpretation
and
indeed
I
do
not
think
I
should,
in
the
interests
of
certainty
in
the
law.
It
is
also
worth
noting
that
it
is
the
payer
himself
who
asked
the
judge
to
decide
as
he
did.
In
view
of
the
judgment
of
the
Québec
Superior
Court,
which
in
making
the
divorce
interpreted
the
nature
of
the
payments
at
issue
in
the
manner
requested
by
the
appellant's
ex-husband,
that
is,
holding
that
the
right
of
habitation
and
the
costs
of
that
habitation
were
in
the
nature
of
a
compensatory
allowance,
and
not
alimony,
since
it
seems
to
me
to
be
of
the
very
essence
of
a
compensatory
allowance
that
it
is
a
payment
on
capital
and
not
income,
and
since
this
judgment
was
not
appealed,
I
consider
that
in
the
circumstances
they
have
no
reason
not
to
accept
the
interpretation
of
the
Superior
Court
as
to
the
nature
of
the
payments
received
by
the
appellant,
and
I
therefore
allow
the
appeal
with
costs.
Appeal
allowed.
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