Tremblay,
TCJ
[TRANSLATION]:—This
case
was
heard
on
April
11,
1983
in
the
city
of
Montreal,
Quebec.
1.
Issue
The
issue
is
whether
the
appellant
is
justified,
in
computing
his
income
for
1975,
1976
and
1977,
in
deducting
as
alimony
amounts
totalling
$4,405
for
rental
of
an
automobile
of
which
his
wife
has
the
use,
as
provided
for
in
the
Court
decree,
together
with
amounts
totalling
$14,624.82
toward
a
total
payment
of
$65,000.
This
latter
amount
is
also
provided
for
in
the
Court
decree,
but
the
120
monthly
payments
of
$541.66
are
the
subject
of
an
agreement
subsequent
to
the
decree
granted.
2.
Burden
of
Proof
2.01
The
appellant
has
the
burden
of
showing
that
the
assessments
of
the
respondent
are
incorrect.
This
burden
of
proof
results
not
from
any
particular
section
of
the
Income
Tax
Act,
but
from
several
judicial
decisions,
including
a
judgment
of
the
Supreme
Court
of
Canada
in
Johnston
v
MNR,
[1948]
CTC
195;
3
DTC
1182.
2.02
The
facts
assumed
by
the
respondent
are
set
out
in
subparagraphs
(a)
to
(k)
of
paragraph
3
of
the
respondent’s
reply
to
the
notice
of
appeal.
This
paragraph
reads
as
follows:
[Translation]
3.
In
assessing
the
appellant
for
the
1975,
1976
and
1977
taxation
years,
the
Minister
of
National
Revenue
relied
on
the
following
facts,
inter
alia:
(a)
The
appellant
married
Dame
Bryna
Levin
on
August
1,
1963;
(b)
On
November
17,
1975,
as
part
of
divorce
proceedings,
the
appellant
and
his
wife
signed
an
agreement
which
provided
as
follows,
inter
alia:
2.
The
Husband
shall
pay
to
the
Wife
for
the
maintenance
of
the
Wife
and
the
children
an
alimentary
allowance
of
eight
hundred
and
thirty
three
dollars
and
thirty
four
cents
($833.34)
per
month
commencing
October
1st,
1975
payable
in
advance
on
the
first
day
of
each
month
without
the
necessity
of
any
notice
or
demand.
4.
The
Husband
shall
continue
to
supply
to
the
Wife
for
her
exclusive
use
an
automobile
of
the
kind
and
value
that
she
is
presently
driving,
and
shall
also
at
his
cost
arrange
to
have
said
automobile
traded
for
a
new
one
of
similar
kind
and
value
every
three
(3)
years.
The
said
automobile
shall
be
supplied
to
the
Wife
at
no
cost
to
her
shall
remain
with
her
at
all
times
and
shall
not
be
subject
to
the
repossession
at
any
time
by
the
Husband
and/or
his
agents
or
assigns.
With
respect
to
the
cost
of
operating
and
maintaining
said
automobile
the
Husband
shall
pay
to
the
Wife
the
sum
of
$166.67
per
month
commencing
October
1st,
1975
and
shall
not
be
responsible
for
any
further
costs
with
respect
to
the
use,
operation
or
maintenance
of
the
said
automobile.
10.
In
addition
to
all
other
obligations
as
set
forth
herein
the
Husband
shall
upon
a
decree
nisi
of
divorce
being
granted
pay
to
the
Wife
a
lump
sum
payment
of
maintenance
of
sixty
five
thousand
dollars
($65,000.00).
11.
The
parties
hereto
further
agree
to
sign
a
short
form
of
consent
to
judgment,
with
respect
to
corollary
relief.
The
said
consent
to
judgment
shall
be
produced
at
the
time
of
the
hearing
of
the
divorce
proceedings,
to
be
incorporated
as
part
of
any
decree
of
divorce
that
may
be
granted
legally
dissolving
the
marriage.
It
is
understood,
however,
that
said
short
form
of
consent
shall
not
be
in
replacement
of
this
present
agreement
but
only
in
supplement
thereof.
(c)
Pursuant
to
paragraph
11
of
the
agreement
referred
to
above,
the
parties
signed
on
that
same
day,
namely
November
17,
1975,
a
document
entitled
“Consent
to
corollary
relief
agreement”,
which
provided
as
follows,
inter
alia:
(b)
The
Respondent
shall
pay
to
the
Petitioner
for
the
maintenance
of
the
Petitioner
and
the
children
an
alimentary
allowance
of
eight
hundred
and
thirty
three
dollars
and
thirty
four
cents
($833.34)
payable
in
advance
on
the
first
day
of
each
month,
without
the
necessity
of
any
notice
or
demand;
(d)
The
Respondent
herein
in
addition
to
all
other
obligations
shall
upon
a
decree
nisi
of
divorce
being
granted
pay
to
the
Petitioner
a
lump
sum
payment
of
maintenance
of
sixty
five
thousand
dollars
($65,000.00);
(e)
The
Respondent
shall
continue
to
supply
to
the
Wife
for
her
exclusive
use
an
automobile
of
the
kind
and
value
that
she
is
presently
driving,
and
shall
also
at
his
cost
arrange
to
have
said
automobile
traded
for
a
new
one
of
similar
kind
and
value
every
three
(3)
years.
The
said
automobile
shall
be
supplied
to
the
Petitioner
at
no
cost
to
her
shall
remain
with
her
at
all
times
and
shall
not
be
subject
to
the
repossession
at
any
time
by
the
Respondent
and/or
his
agents
or
assigns.
With
respect
to
the
cost
of
operating
and
maintaining
said
automobile
the
Respondent
shall
pay
to
the
Petitioner
in
each
year
a
sum
of
two
thousand
dollars
($2,000.00)
and
shall
not
be
responsible
for
any
further
costs
with
respect
to
the
use,
operation
or
maintenance
of
the
said
automobile;
(d)
On
February
11,
1976
the
Superior
Court,
Family
Division
(Divorce),
presided
over
by
Charles
Gonthier
J,
granted
a
decree
nisi
of
divorce
between
the
appellant
and
Dame
Bryna
Levin;
(e)
The
said
decree
nisi
also
incorporated
the
document
entitled
“Consent
to
corollary
relief”
as
signed
by
the
parties
on
November
17,
1975;
(f)
Following
the
Superior
Court’s
decree,
the
appellant
and
his
spouse
agreed,
on
February
19,
1976,
that
the
lump
sum
amount
of
$65,000.00
would
not
be
paid
in
a
single
instalment
but
rather
in
a
series
of
monthly
payments
in
the
amount
of
$541.66
over
a
period
of
120
consecutive
months
commencing
on
October
1,
1975;
(g)
As
required
by
the
decree
nisi
of
divorce,
the
appellant
leased
an
automobile
which
he
made
available
to
his
wife;
the
appellant
paid
the
automobile
leasing
company
the
following
amounts:
1975
—
$
489.00
1976
—
$1,956.00
1977
—
$1,960.00
(h)
In
his
tax
returns
for
1975,
1976
and
1977,
the
appellant
claimed
the
following
amounts
as
alimony
deductions:
1975
—
$
5,114.00
1976
—
$20,456.00
1977
—
$20,460.00
(i)
The
respondent
disallowed
the
following
amounts
as
alimony:
1975
—
$2,114.00
1976
—
$8,456.00
1977
—
$8,460.00
(j)
The
amounts
disallowed
as
alimony
deductions
can
be
broken
down
as
follows:
Year
Lump
sum
payments
1975
—
$1,624.98
(3
x
541.66)
1976
—
$6,500.00
(12
x
541.66)
1977
—
$6,500.00
(12
541.66)
Year
Leasing
of
automobile
1975
—
$
489.09(3
x
163.03)
(k)
The
respondent
disallowed
the
above-mentioned
amounts
because
they
were
not
amounts
paid
by
the
appellant
in
the
year
pursuant
to
the
decree
or
the
written
agreement,
as
the
case
may
be,
as
alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof,
pursuant
to
section
60(b)
of
the
Income
Tax
Act,
and
since
they
were
also
not
amounts
paid
for
the
benefit
of
his
spouse
within
the
meaning
of
section
60.1
of
that
Act;
|
1976
—
$1,956.00
(12
|
163.03)
|
|
1977
—
$1,960.00
(12
|
163.03)
|
3.
Facts
3.01
Facts
admitted
by
the
respondent
In
his
reply
to
the
notice
of
appeal,
the
respondent
admitted
the
facts
set
out
in
paragraphs
1
to
18
of
the
appellant’s
notice
of
appeal.
These
paragraphs
read
as
follows:
1.
Marvin
Tanner
is
a
taxpayer
who
filed
tax
returns
for
the
1975,
1976
and
1977
taxation
years
in
the
prescribed
form
and
within
the
prescribed
time
limits;
2.
In
his
1975
tax
return,
Marvin
Tanner
claimed
the
sum
of
$5,114.00
as
an
alimony
deduction;
3.
For
the
1976
taxation
year
Marvin
Tanner
claimed
the
sum
of
$20,456.00
as
an
alimony
deduction;
4.
For
the
1977
taxation
year
Marvin
Tanner
claimed
the
sum
of
$20,460.00
as
an
alimony
deduction;
5.
By
a
notice
of
assessment
bearing
number
33304905
and
ated
April
26,
1979,
the
Department
of
National
Revenue
disallowed
the
sum
of
$489.00
claimed
as
an
alimony
deduction
for
the
1975
taxation
year;
6.
By
a
notice
of
assessment
bearing
number
33439858
and
dated
April
26,
1979,
the
Department
of
National
Revenue
disallowed
the
sum
of
$1,956.00
claimed
as
an
alimony
deduction
for
the
1976
taxation
year;
7.
By
a
notice
of
assessment
bearing
number
32035251
and
dated
April
26,
1979,
the
Department
of
National
Revenue
disallowed
the
sum
of
$1,960.00
claimed
as
an
alimony
deduction
for
the
1977
taxation
year;
8.
On
June
29,
1979
Marvin
Tanner,
through
his
auditors,
objected
to
the
notices
of
assessment
referred
to
in
the
preceding
three
paragraphs;
9.
On
May
13,
1980,
pursuant
to
subsection
165(3)
of
the
Income
Tax
Act,
the
Department
issued
a
reassessment
for
the
1975
taxation
year,
being
number
33304905,
disallowing
a
further
amount
of
$2,125.00
as
an
alimony
deduction;
10.
On
May
13,
1980,
pursuant
to
subsection
165(3)
of
the
Income
Tax
Act,
the
Department
issued
a
reassessment
for
the
1976
taxation
year,
bearing
number
33439858,
disallowing
a
further
amount
of
$8,500.00
as
an
alimony
deduction;
11.
On
May
13,
1980,
pursuant
to
subsection
165(3)
of
the
Income
Tax
Act,
the
Department
issued
a
reassessment
for
the
1977
taxation
year,
bearing
number
320350251,
disallowing
a
further
amount
of
$10,460.00
as
an
alimony
deduction;
12.
The
taxpayer
duly
objected
to
his
assessments
for
1975
and
1976
and
is
objecting
to
the
reassessments
made
by
the
Department
under
subsection
165(3)
of
the
Income
Tax
Act:
13.
Following
the
two
notices
of
assessment
for
1975,
a
sum
of
$2,614.00
was
disallowed
as
alimony
for
Mr
Tanner.
This
sum
can
be
broken
down
as
follows:
$189.00
as
an
automobile
leasing
payment,
a
sum
of
$500.00
as
an
automobile
maintenance
expense
and
a
lump
sum
payable
monthly
of
$1,925.00;
14.
Following
the
two
notices
of
assessment
for
the
1976
taxation
year,
a
sum
of
$10,456.00
was
disallowed
as
alimony
for
Mr
Tanner.
This
sum
can
be
broken
down
as
follows:
$1,956.00
as
an
automobile
leasing
payment,
a
sum
of
$2,000.00
as
an
automobile
maintenance
expense
and
a
lump
sum
payable
monthly
of
$6,500.00;
15.
Following
the
two
notices
of
assessment
for
the
1977
taxation
year,
a
sum
of
$10,460.00
was
disallowed
as
alimony
for
Mr
Tanner.
This
sum
can
be
broken
down
as
follows:
$1,960.00
as
an
automobile
leasing
payment,
a
sum
of
$2,000.00
as
an
automobile
maintenance
expense
and
a
lump
sum
payable
monthly
of
$6,500.00;
16.
On
July
17,
1981,
by
its
notice
of
assessment
940891,
and
further
to
the
notice
of
objection
referred
to
in
paragraph
12
above,
the
Department
issued
reassessments
for
the
1975
taxation
year
in
which
it
allowed
the
sum
of
$500.00
paid
as
automobile
maintenance
expenses;
17.
On
July
17,
1981,
by
its
notice
of
assessment
940918,
and
further
to
the
notice
of
objection
referred
to
in
paragraph
12
above,
the
Department
issued
reassess-
ments
for
the
1976
taxation
year
in
which
it
allowed
the
sum
of
$2,000.00
paid
as
automobile
maintenance
expenses;
18.
On
July
17,
1981,
by
its
notice
of
assessment
940919,
and
further
to
the
notice
of
objection
referred
to
in
paragraph
12
above,
the
notice
of
objection
referred
to
in
paragraph
12
above,
the
Department
issued
reassessments
for
the
1977
taxation
year
in
which
it
allowed
the
sum
of
$2,000.00
paid
as
automobile
maintenance
expenses.
3.02
Facts
proved
by
witnesses
and
documents
at
the
hearing
3.02.1
At
the
commencement
of
the
hearing
counsel
filed
the
following
exhibits
by
mutual
agreement:
(a)
Exhibit
A-1
—
agreement
of
November
17,
1975
providing,
inter
alia,
that
the
appellant
would
pay:
(i)
alimony
of
$833.34
(para
2);
(ii)
$166.67
for
the
cost
of
maintaining
the
automobile
of
which
his
wife
would
have
the
use
(para
4);
(iii)
a
lump
sum
payment
of
$65,000
(para
10).
These
paragraphs
2,
4
and
10
of
the
agreement
are
reproduced
above
(para
2.02)
in
paragraph
(b)
of
the
facts
assumed
by
the
respondent.
(b)
Exhibit
A-2
—
“Consent
to
Corollary
Relief”
of
November
17,
1975.
This
document,
which
in
substance
contains
the
same
clauses
as
Exhibit
A-1,
was
to
be
filed
with
the
Court
at
the
divorce
hearing.
The
most
important
paragraphs
of
Exhibit
A-2,
namely
(b),
(d)
and
(e),
are
reproduced
above
(para
2.02)
in
paragraph
(c)
of
the
facts
assumed
by
the
respondent
in
his
reply
to
the
notice
of
appeal.
(c)
Exhibit
A-3
—
The
Decree
of
Divorce
rendered
by
the
Quebec
Superior
Court
on
February
11,
1976.
It
incorporated
the
“Consent
to
Corollary
Relief”
(Exhibit
A-2).
(d)
Exhibit
A-4
—
This
is
a
letter
of
agreement
dated
February
19,
1976
addressed
to
the
appellant
and
countersigned
by
him
to
indicate
his
agreement
as
to
the
contents,
which
concern
payment
of
the
sum
of
$65,000.
According
to
the
appellant’s
former
wife,
this
document,
even
though
it
was
signed
on
February
19,
1976,
was
prepared
in
the
fall
of
1975
at
the
same
time
as
Exhibit
A-1
and
Exhibit
A-2.
This
Exhibit
A-4
is
of
such
importance
that
we
shall
set
it
out
in
full:
With
respect
to
the
lump
sum
of
sixty-five
thousand
dollars
($65,000.00)
due
to
me
by
yourself
in
virtue
of
the
divorce
that
has
been
granted
today,
I
acknowledge
your
request
for
a
delay
to
pay
said
sum
to
me
and
I
am
prepared
to
accept
payment
of
the
sum
of
$65,000.00
by
means
of
one
hundred
and
twenty
(120)
consecutive
monthly
instalments
of
$541.66
commencing
October
1st,
1975,
without
interest
subject
to
the
following
conditions
which
are
essential
and
without
which
I
shall
not
grant
any
delay
for
payment,
namely:
(1)
That
the
monthly
instalments
be
paid
to
me
without
notice
or
demand
on
the
first
day
of
each
month
commencing
with
the
month
October,
1975
and
to
continue
on
each
successive
month
until
full
payment
of
the
said
sum
of
$65,000.00
has
been
made.
I
acknowledge
having
received
the
payments
for
all
of
the
months
from
October
1,
1975
to
and
including
the
current
month.
In
the
event
of
default
in
the
making
of
any
one
payment
and
provided
that
such
default
is
not
remedied
within
twenty
(20)
days
following
notice
in
writing
of
such
default
then
the
whole
remaining
outstanding
balance
at
that
time
shall
immediately
become
due
and
exigible
without
any
further
notice
or
demand,
it
being
agreed
that
any
such
default
shall
ipso
facto
terminate
the
delay
granted
to
you
herein.
(2)
That
in
view
of
the
fact
that
the
full
sum
of
$65,000.00
is
due
immediately,
and
that
a
delay
has
been
requested
by
you,
it
must
be
agreed
and
understood
that
I
shall
not
suffer
any
prejudice
by
my
granting
such
delay
and
it
is
therefore
agreed
that
any
change
in
circumstances
prior
to
my
receiving
full
payment
of
the
said
sum
of
$65,000.00
shall
not
avail
in
your
favor
to
either
cancel
or
reduce
the
said
amount.
Under
the
circumstances
any
change
in
the
status
of
either
myself
or
yourself
such
as
a
remarriage
by
either
of
us
or
the
death
of
either
of
us
shall
not
in
any
way
affect,
reduce
or
cancel
said
payments
or
the
balance
thereof.
In
addition
the
said
payments
or
the
balance
thereof
shall
not
be
affected,
changed,
altered
or
cancelled
by
reason
of
any
change
in
the
financial
circumstances
of
either
of
us
and
you
shall
continue
to
remain
responsible
for
the
full
amount
of
$65,000.00
or
the
balance
thereof
notwithstanding
any
deterioration
in
your
financial
circumstances.
In
addition
in
the
event
of
your
death
prior
to
the
full
payment
of
the
sum
of
$65,000.00
your
estate
shall
continue
to
remain
bound
to
me
for
the
payment
of
any
balance
and
in
the
event
of
my
death
prior
to
the
full
payment
you
and/or
your
estate
shall
continue
to
remain
responsible
to
my
estate
for
any
balance.
(3)
For
tax
purposes
only,
it
is
intended
that
the
said
sum
of
$65,000.00
and
the
instalments
thereon
shall
be
deductible
as
alimony
payments
for
income
tax
purposes
from
your
income
and
that
the
same
shall
be
taxable
in
my
hands.
In
the
event
that
you
are
not
permitted
to
take
such
payments
as
tax
deductions
as
aforesaid,
I
shall
indemnify
you
in
an
amount
equal
to
the
difference
between
taxes
that
you
will
be
obliged
to
pay
and
the
amount
that
you
would
have
been
obliged
to
pay
had
the
said
contemplated
deductions
been
permitted,
the
whole
on
or
prior
to
the
date
or
dates
in
each
year
or
years
that
the
said
difference
has
become
payable
to
the
appropriate
governmental
authority:
such
difference
to
be
determined
by
Mr
Stanley
Pinkus,
CA
or
such
other
accountant
as
you
may
choose
and
shall
be
subject
to
verification
by
an
accountant
chosen
by
myself
who
shall
have
access
to
all
necessary
documents.
As
stated,
previously,
I
am
prepared
to
grant
a
delay
for
payment
only
upon
the
above
conditions
and
if
you
are
in
agreement
with
same,
kindly
indicate
your
acceptance
by
signing
and
returning
one
copy
of
this
letter
to
me.
3.02.2
The
appellant
and
his
former
wife,
Bryna,
were
married
in
Ottawa
in
1963.
She
was
a
school
teacher.
She
worked
for
two
years
after
the
marriage.
3.02.3
Two
children
were
born
of
this
marriage.
3.02.4
After
the
divorce
was
granted
in
1976,
the
appellant
remarried.
So
did
his
former
wife.
Her
name
is
now
Bryna
Cohen.
3.02.5
At
the
commencement
of
Mrs
Cohen’s
testimony,
counsel
for
the
respondent
objected
to
any
evidence
being
given
that
might
contradict
the
written
instruments
filed
as
exhibits,
pursuant
to
Article
1234
of
the
Civil
Code.
The
Court
allowed
such
testimony
subject
to
a
later
decision.
3.02.6
At
the
commencement
of
Mrs
Cohen’s
testimony
a
series
of
12
cheques
for
$1,541.67
dated
the
first
of
each
month
of
1976
was
filed.
This
sum
of
$1,541.67
consisted
of
the
following
amounts:
(a)
alimony:
$833.34
(Exhibit
A-1,
para
2);
(b)
automobile:
$166.67
(Exhibit
A-1,
para
4);
(c)
instalment
on
the
$65,000:
$541.66
(Exhibit
A-4,
introductory
paragraph).
3.02.7
According
to
the
testimony
of
the
appellant
and
his
former
wife,
several
problems
had
to
be
settled
at
the
same
time
as
those
relating
to
the
divorce
(custody
of
the
children,
determination
of
the
amount
of
alimony,
ownership
of
the
assets
in
the
house,
the
former
wife’s
property,
and
so
on).
The
main
issue
was
the
sale
of
the
shares
in
NiVel
Sales
to
the
appellant.
The
appellant
managed
this
company,
NiVel
Sales
Ltd,
all
of
the
common
shares
of
which
were
held
by
his
former
wife’s
mother
and
in
which
he
and
his
former
wife
each
owned
50
per
cent
of
the
non-voting
shares.
In
addition,
a
substantial
debt
was
owed
by
the
company
to
the
appellant’s
former
wife’s
mother.
The
questions
of
the
value
of
these
shares
and
how
they
were
to
be
paid
for
were
settled
in
the
fall
of
1975,
at
the
same
time
as
the
problems
raised
by
the
divorce.
Each
of
the
parties
were
present,
as
well
as
the
father
and
mother
of
the
appellant’s
former
wife,
and
each
had
his
own
counsel,
accountant
and
tax
expert.
3.02.8
The
appellant
and
his
former
wife
also
testified
that
the
sum
of
$65,000
had
been
established
on
the
basis
of
the
fact
that
approximately
$1,375
($833.34
+
541.66)
was
required
for
the
maintenance
of
the
mother
and
the
children,
apart
from
the
automobile,
and
that
it
would
take
approximately
10
years
(120
months)
for
the
wife
to
become
self-supporting.
This
is
why
the
sum
of
$541.66
was
paid
monthly
over
120
months,
for
a
total
of
$65,000.
3.02.9
With
respect
to
the
automobile
expenses,
it
was
clearly
established
that
the
sums
paid
to
the
wife
for
the
maintenance
of
the
automobile
($166.67
a
month)
were
deductible
in
computing
appellant’s
income.
The
sums
disallowed,
which
totalled
$14,624.82,
were
those
paid
to
a
third
party,
namely
the
automobile
leasing
company.
4.
Act
—
case
law
—
analysis
4.01
Act
The
main
provisions
of
the
Income
Tax
Act
involved
in
the
case
at
bar
are
paragraphs
56(1
)(b),
60(b)
and
section
60.1.
These
provisions
read
as
follows:
56.
(1)
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(b)
any
amount
received
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
the
recipient
was
living
apart
from,
and
was
separated
pursuant
to
a
divorce,
judicial
separation
or
written
separation
agreement
from,
the
spouse
or
former
spouse
required
to
make
the
payment
at
the
time
the
payment
was
received
and
throughout
the
remainder
of
the
year;
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;
60.1
Where,
after
May
6,
1974,
a
decree,
order,
judgment
or
written
agreement
described
in
paragraph
60(b)
or
(c),
or
any
variation
thereof,
has
been
made
providing
for
the
periodic
payment
of
an
amount
by
the
taxpayer
to
or
for
the
benefit
of
his
spouse,
former
spouse
or
children
of
the
marriage
in
the
custody
of
the
spouse
or
former
spouse,
the
amount
or
any
part
thereof,
when
paid,
shall
be
deemed
to
have
been
paid
to
and
received
by
the
spouse
or
former
spouse
if
the
taxpayer
was
living
apart
from
the
spouse
or
former
spouse
at
the
time
the
payment
was
received
and
throughout
the
remainder
of
the
year
in
which
the
payment
was
received.
4.02
Case
law
The
following
cases
were
cited
by
the
parties:
1.
The
Queen
v
Gordon
A
Bryce,
[1982]
CTC
133;
82
DTC
6126;
2.
The
Queen
v
Louis
Dorion,
[1981]
CTC
136;
81
DTC
5111;
3.
David
Franklin
v
MNR,
[1981]
CTC
2518;
81
DTC
468;
4.
Guy
Gagné
v
MNR,
[1982]
CTC
2655;
82
DTC
1672;
5.
The
Queen
v
Jean
Paul
Gagnon,
[1981]
CTC
463;
81
DTC
5377;
6.
The
Queen
v
Morton
Pascoe,
[1975]
CTC
656;
75
DTC
5427;
7.
Melvin
Pisony
v
MNR,
[1982]
CTC
2010;
82
DTC
1023;
8.
Gilles
St-Arnaud
v
MNR,
[1982]
CTC
2697;
82
DTC
1723;
9.
MNR
v
Dorila
Trottier,
[1967]
CTC
28;
67
DTC
5029;
[1968]
CTC
324;
68
DTC
5216;
10.
Takis
P
Veliotis
v
The
Queen,
[1974]
CTC
237;
74
DTC
6190;
11.
The
Attorney
General
of
Canada
v
James
C
Weaver
et
al,
[1975]
CTC
646;
75
DTC
5462;
12.
J
Adrien
Lavoie
v
The
Queen,
[1979]
CTC
48;
79
DTC
5059;
13.
Gaëtan
Leclair
v
MNR,
[1982]
CTC
2715;
82
DTC
1755;
14.
MNR
v
William
Albert
Hansen,
[1967]
CTC
440;
67
DTC
5293.
4.03
Analysis
4.03.1
According
to
the
evidence
adduced
the
two
issues
are:
(a)
the
sum
of
$14,624.98
paid
to
the
automobile
leasing
company;
and
(b)
the
sum
of
$65,000
paid
to
the
wife
in
equal
consecutive
instalments
of
$541.66.
4.03.2
With
respect
to
the
sum
of
$14,624.98
paid
to
the
automobile
leasing
company
during
the
years
in
question
(see
para
3.02.9),
the
Court
is
bound
by
the
decisions
rendered
by
the
Federal
Court
of
Appeal
in
Gordon
A
Bryce
and
Jean-Paul
Gagnon
(para
4.02,
Nos
1
and
5).
These
judgments
are
to
the
effect
that
payments
to
third
parties
(Bryce)
or
even
to
the
wife
(Gagnon),
but
with
an
obligation
to
pay
a
third
party,
the
mortgagee,
cannot
constitute
an
alimentary
allowance
as
defined
in
Pascoe
(para
4.02,
No
6).
This
amount
is
not
in
effect
at
the
wife’s
complete
disposition
without
her
being
required
to
account
for
it,
regardless
of
whether
she
benefits
from
it
within
the
meaning
of
section
60.1
cited
above.
These
cases
were
appealed
to
the
Supreme
Court,
however.
4.03.3
With
respect
to
the
sum
of
$65,000,
that
is,
the
120
monthly
payments
of
$541.66,
the
appellant
and
his
wife
testified
that
this
amount
had
been
established
on
the
basis
of
the
needs
of
the
wife
and
the
children
and
the
time
the
wife
would
require
to
become
self-supporting.
In
Gaëtan
Leclair
(para
4.02,
No
13)
the
Tax
Review
Board
decided
in
favour
of
the
appellant
because
a
sum
of
$17,000
paid
in
monthly
instalments
had
been
determined
on
the
basis
that
the
wife
would
need
about
four
years
to
retrain
herself
so
that
she
could
participate
fully
in
the
labour
market
and
thus
support
herself.
Nothing
in
the
documentary
evidence
could
contradict
this
interpretation
made
following
the
appellant
Leclair’s
testimony.
In
the
case
at
bar
the
testimony
seems
to
contradict
Exhibit
A-4,
namely
the
letter
of
agreement
of
February
19,
1976
(see
para
3.02.1(d)).
According
to
this
agreement
it
was
following
a
request
made
by
the
appellant
to
his
wife
that
the
latter
granted
him
additional
time
in
which
to
pay
the
said
sum
of
$65,000.
See
the
introductor
paragraph
and
also
the
first
two
lines
of
paragraph
2
of
Exhibit
A-4.
Moreover,
this
additional
time
was
granted
on
the
following
conditions:
(1)
in
the
event
of
default
in
paying
the
monthly
instalment
of
$541.66
and
where
such
default
is
not
remedied
within
20
days
following
notice,
the
total
amount
shall
become
due
and
exigible;
and
(2)
even
if
the
wife
remarries,
or
becomes
very
wealthy
or
dies
or
even
if
the
appellant
himself
dies,
the
balance
outstanding
must
still
be
paid.
It
is
clear
to
the
Court
that
Exhibit
A-4
expresses
the
true
intention
of
the
parties.
It
was
written
at
the
time
when
the
decisions
were
made.
It
is
clear
that
by
its
very
nature
alimony
can
be
paid
only
during
the
lifetime
of
the
two
parties
in
question.
How
can
the
entire
sum
of
$65,000
be
regarded
as
alimony
when
it
is
the
intention
of
the
parties
that
the
payments
are
to
continue
to
be
made
after
either
one
of
them
dies?
The
Court
can
therefore
not
regard
the
monthly
payments
of
$541.66
as
“alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof”
within
the
meaning
of
paragraph
60(b).
4.03.4
The
Court
can
only
uphold
the
assessments
issued
by
the
respondent.
5.
Conclusion
The
appeal
is
dismissed
in
accordance
with
the
foregoing
reasons
for
judgment.
Appeal
dismissed.
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