Brulé,
T.C.J.:—This
is
an
appeal
from
a
reassessment
by
the
Minister
of
the
appellant’s
1979
income
tax
in
which
there
was
disallowed
a
claim
for
a
$3,000
deduction.
Issue
The
issue
is
whether
or
not
the
$3,000
in
question
was
a
proper
payment
by
the
appellant
to
his
former
spouse
in
order
to
qualify
for
a
deduction
under
paragraph
60(b)
of
the
Income
Tax
Act.
Facts
The
appellant
was
married
to
Betty
Jean
Cook
in
1953
and
separated
from
her
in
1970.
In
1970
a
separation
agreement
was
entered
into
between
the
parties
and
varied
as
to
the
amount
to
be
paid
by
a
subsequent
agreement
in
1971.
One
of
the
terms
of
the
original
agreement
(not
affected
by
the
amending
agreement
of
1971)
reads
as
follows:
4.
It
is
further
agreed
that
the
negotiations
now
being
carried
on
between
the
parties
may
be
terminated
at
any
time
by
either
party
forwarding
by
registered
mail
written
notice
of
such
termination
to
the
last
known
place
of
residence
of
the
other,
or
to
the
other’s
solicitors,
such
termination
to
become
effective
within
fifteen
(15)
days
of
the
receipt
of
such
notice,
and
then,
and
in
that
event,
this
interim
agreement
shall
become
null
&
void
and
the
parties
shall
be
free
to
institute
or
defend
whatever
legal
proceedings
they
may
deem
advisable
free
and
clear
of
any
obligation
herein
set
out.
Subsequently
on
December
20,
1974,
the
solicitor
for
the
appellant,
Leonard
Max,
forwarded
a
registered
letter
to
Mrs.
Cook's
solicitor
in
which
he
stated
in
part
as
follows:
The
written
agreement
paragraph
4
contains
provision
for
termination.
Please
note
that
effective
January
15th
1975
Mr.
Cook
terminates
the
foregoing
agreements,
but
will
voluntarily
and
without
prejudice
continue
payments
at
the
rate
of
$7,500.00
per
annum
payable
in
equal
monthly
instalments
twice
monthly.
The
appellant
continued
to
make
payments
until
1979
when,
during
the
year,
the
former
spouse
advised
they
were
no
longer
needed.
Until
1979
the
appellant
had
apparently
made
the
payments
and
deducted
these
from
his
income
and
was
assessed
accordingly.
In
the
1979
assessment
Revenue
Canada
disallowed
the
deduction
of
$3,000.
Appellant’s
Position
The
solicitor
for
the
appellant,
Leonard
Max,
gave
evidence
that
he
had
indeed
forwarded
the
letter
of
December
20,
1974,
but
subsequently
advised
Mrs.
Cook's
solicitor
before
the
15-day
period
expired
as
set
out
in
the
1970
agreement
to
disregard
the
letter.
As
a
result
he
believed
the
Agreement
to
be
still
in
effect
and
payments
were
continued.
The
appellant
Mr.
Cook
also
believed
that
he
was
still
bound
by
the
agreement.
Counsel
argued
that
the
agreement
was
not
terminated
by
the
letter
of
December
20,
1974,
because
the
letter
was
rescinded
on
instructions
from
the
client.
Counsel
said
further
that
if
the
Agreement
was
terminated
then
another
arose
as
a
result
of
correspondence
which
however
was
not
capable
of
being
produced
as
a
result
of
the
loss
of
control
over
the
files;
or
alternatively
by
the
conduct
of
the
parties
who
followed
the
terms
of
the
original
and
amended
agreements.
It
was
pointed
out
that
paragraph
60(b)
does
not
require
another
written
agreement
upon
the
termination
of
a
former
one,
and
that
the
words
of
the
Income
Tax
Act
are
satisfied
by
the
conduct
of
the
parties.
Minister's
Position
Paragraph
60(b)
is
a
deduction
section
and
must
be
strictly
construed.
Counsel
said
the
agreement
was
terminated
by
the
letter
of
December
20,
1974,
and
was
not
properly
put
back
into
force.
While
the
conduct
between
the
parties
was
not
disputed
and
payments
were
made,
such
took
place
perhaps
only
as
a
moral
responsibility
from
1975
on
and
did
not
satisfy
the
provisions
of
paragraph
60(b).
In
support
of
this
argument
the
Court
was
referred
to
the
cases
of
Carmen
E.
Knapp
v.
M.N.R.,
[1985]
2
C.T.C.
2046;
85
D.T.C.
424,
and
Sarah
Richter
v.
M.N.R.,
[1977]
C.T.C.
2261;
77
D.T.C.
183.
Analysis
Paragraph
60(b)
of
the
Income
Tax
Act
reads
as
follows:
Sec.
60—There
may
be
deducted
in
computing
a
taxpayer’s
income
for
a
taxation
year
such
of
the
following
amounts
as
are
applicable:
(b)
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,
children
of
the
marriage,
or
both
the
recipient
and
children
of
the
marriage,
if
he
was
living
apart
from,
and
was
separated
pursuant
to
a
divorce,
judicial
separation
or
written
separation
agreement
from,
his
spouse
or
former
spouse
to
whom
he
was
required
to
make
the
payment
at
the
time
the
payment
was
made
and
throughout
the
remainder
of
the
year;
In
this
case
there
is
no
doubt
that
there
existed
a
valid
written
separation
agreement
sufficient
to
satisfy
the
requirements
of
the
statute.
That
agreement
however
was
purportedly
properly
terminated
by
the
letter
of
December
20,
1974.
The
question
is
whether
or
not
the
letter
was
rescinded
with
the
result
that
the
agreement
remained
in
effect.
While
evidence
was
given
that
some
act
was
done
to
rescind
the
December
20,
1974
letter,
no
positive
proof
other
than
parol
evidence
was
provided
to
the
Court.
The
author
in
Cheshire
and
Fifoot's
Law
of
Contract,
Tenth
edition,
1981,
relying
on
the
case
of
Dickinson
v.
Dodds
(1876),
2
Ch.D.
463,
indicates
at
page
451
that
if
a
person
relies
on
a
revocation
he
must
prove
not
only
that
he
has
done
some
act
which
manifests
his
intention,
but
that
the
other
party
has
knowledge
of
that
act.
Here
was
have
no
such
proof
following
the
registered
letter
of
December
20,
1974,
terminating
the
agreement.
The
other
argument
that
the
conduct
of
the
parties
was
such
that
there
was
an
implied
agreement
also
fails.
Such
does
not
come
within
the
provisions
of
the
Income
Tax
Act,
and
in
support
of
this
I
refer
to
the
case
of
Keith
Norman
Fryer
v.
M.N.R.,
31
Tax
A.B.C.
143;
63
D.T.C.
176,
wherein
at
144
(D.T.C.
177),
Assistant
Chairman
R.S.W.
Fordham,
Q.C.
of
the
Tax
Appeal
Board
said
in
relation
to
an
alleged
written
separation:
What
is
required
is
a
formal
document
on
which
an
action
by
a
wife
for
nonpayment
could
be
founded
in
the
appropriate
court,
without
the
necessity
of
adducing
extrinsic
evidence.
Here
there
was
such
a
document;
it
ceased
to
exist
early
in
January
1975
and
while
the
appellant
felt
bound
to
make
payments
according
to
the
original
agreement,
and
did
so,
such
were
not
in
conformity
with
paragraph
60(b)
of
the
Income
Tax
Act.
The
appeal
fails
and
is
hereby
dismissed.
There
will
be
no
costs
awarded.
Appeal
dismissed.
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