Paul Harold McGrath v. Minister of National Revenue, [1979] CTC 3146, 79 DTC 912

Delmer E Taylor:—This appeal, heard in the City of Toronto, Ontario, on September 19, 1979, is against income tax assessments in which the Minister of National Revenue disallowed the appellant’s claim on account of maintenance payments with respect of the 1975 and 1976 taxation years. In assessing the appellant, the respondent relied, inter alia, upon section 3 and paragraph 60(b) of the Income Tax Act, SC 1970-71-72, c 63 and amendments thereto.

Background

In computing his income for the 1975 and 1976 taxation years, the appellant sought to deduct the following amounts as maintenance payments made to one Mary Clazie:

Contentions

The position of the appellant as detailed in his notice of appeal was as follows:

Pursuant to the provisions of The Family Law Reform Act, 1978, a “child” is entitled to support, and a parent is obliged to support, any child whether born within or outside a marriage (s 1(a); s 16(1); s 1(e)).

For the purposes of child support in Ontario, a matter within the jurisdiction of provincial powers being matters in the nature of property and civil rights, no distinction is drawn between so called ‘legitimate’ fathers and so called ‘nonlegitimate’ or ‘putative’ fathers.

If the Income Tax Act purports to discriminate between legitimate and nonlegitimate fathers who are ordered by a Court to pay support for their children, as to the right to deduct such payments, such provisions would be repugnant and ultra vires, as they would be contrary to paragraphs 1(a) and (b) of the Canadian Bill of Rights.

It is submitted further that the defined legal relationships and legal status of parents to their children, a matter of property and civil rights, is a matter for provincial determination and any contrary determination by federal authority would be ultra vires.

The assertions of the respondent were that:

—The appellant and the said Mary Clazie were at no time married;

—a child was born out of wedlock to the appellant and the said Mary Clazie on September 18, 1976;

—the maintenance payments sought to be deducted by the appellant in his 1975 and 1976 taxation years were payments made to the said Mary Clazie.

—the amounts claimed by the appellant as deductions from income for the 1975 and 1976 taxation years as maintenance payments were not amounts paid to his spouse or on behalf of a child of the marriage within the meaning of paragraph 60(b) of the Income Tax Act.

Evidence and Argument

There was no dispute as to the facts and no evidence was called by either party.

The following excerpts are taken from the verbatim reports of the hearing and serve to establish the positions put forward by both parties. (The italics throughout are mine.)

For the appellant:

The facts are really quite simple. Mr McGrath, pursuant to an order of the Family Court, which was made in or about April of 1970, pursuant to an affiliation application that was then brought under the Child Welfare Act was found to be the father of a child born out of wedlock to one Mary Patricia Clazie and was ordered to pay for support of such child a $15 per week, which he in fact had been paying. The procedure in the Family Court (and what in fact has taken place) is that monies are paid into the Family Court, which then processes it and pays it presumably to a Mary Clazie. It is an administrative procedure which the Courts have followed to enforce these orders . . . Mr McGrath attempted to claim a deduction for these amounts okayed and was denied. It is my understanding that the department’s position is that he is disentitled to claim a deduction by reason of his failure to come within the ambit of section, what is now section 60, either subsection (b) or subsection (c) of the Income Tax Act which appears to be the operative section in this sort of situation, by reason of the fact that this child is not a child of the marriage.

The position that I propose to present to you or one of the positions which is contained in the supplementary reasons is that the phrase or the meaning which must be given to the phrase children of the marriage does not in law require there

(has) to be an actual marriage between a man and a woman, but that rather the phrase means or is interpreted to mean that a relationship exists between a child and another person, for want of a better word, I will use the word parent. . . .

. . . the key question in my submission is what is meant by the phrase children of the marriage . . .

Before making reference to a Supreme Court of Canada decision which has interpreted the same phrase in the context of the Divorce Act, I would make reference to another section of the Income Tax Act—section 252, subsection (1) and that provision states that in this Act words referring to a child of the taxpayer include an illegitimate child of the taxpayer. Now, if we superimpose the extended meaning of child contained in the Income Tax Act to the phrase children of the marriage which is used in section 60, it is my respectful submission that it weakens the position that there must be an actual marriage in order for there to be a child of the union because obviously it would be inconsistent and incongruous to have an illegitimate child as being part of the meaning of child if there is no marriage .. . What you require is a child who stands in relationship to a parent who received support pursuant to a Court order.

The Family Law Reform Act is a provincial statute which was brought into effect in March of 1978 and in that statute in the definition section, the word child is defined as meaning a child born within or outside marriage for the purposes of Ontario law and for the purposes of this jurisdiction, the status of legitimacy and illegitimacy has been effectively abolished when thinking in terms of the phrase children or the person being a child.

. .. And spouse is defined as—including either of a man or a woman not being married to each other who have cohabited continuously for a period of not less than five years or in a relationship of some permanence . ..

So the use of the word born of the marriage is entirely superfluous to support obligations in Ontario.

I now refer you the the Divorce Act .. .—this is Federal Legislation which defines child in section 2 and includes not only a person born of a married mother or father, but a person to whom another stranger stands in loco parentis . . . So under both provincial authority and federal legislation, the proposition that I’m advancing are twofold. Number one, that support or the obligation to pay support can be ordered by a Court or a competent tribunal to a person who has not married the natural mother of the child and second, then it is not necessary for a child to be a child born of a marriage. It can be a child of a person who has no blood connection whatsoever with that child pursuant to the Divorce Act and pursuant to the Family Law Reform Act, it can be any person who has parented a child regardless of whether they had married the natural mother or not.

I am taking the position that the words of the marriage after the word children in section 60, paragraphs (b) and (c) of the Income Tax Act do not limit the right to a deduction only to those people who have in fact married the mother of this child. I submit that the governing word and the key word is the word child and that that child need not be a product of a legitimized union.

In determining the question of what is meant by the phrase the child, Mr Justice Ritchie (in the Supreme Court of Canada judgment Jackson v Jackson 29 DLR (3d) 641) defines “child” of a husband and wife as including any person to whom the husband and wife or either of them stands in in loco parentis and the words “children of the marriage”, in respect of whom maintenance payments may be ordered, are used as a term of relationship and not as synonymous with the common law meaning of child as ‘‘a person who has not attained his majority.”

. . . at p 647 (of that decision) he says:

As I have said, I am of opinion that the words “children of the marriage” as defined in paragraph 2(b) are clearly used as a term of relationship. . . .

That is, a term of relationship between the child and that person who may be ordered to pay him support. Notwithstanding whether that person has married his mother.

. . . the Family Law Reform Act definition of spouse would include Mr McGrath and I might go on to say that the word spouse may be seen to mean nothing more than a parent of a child or another person with whom you have parented a child.

.. . those are the submissions with respect to what I would ask you to find as being the meaning of the phrase children of the marriage. I do have an additional point that I want to argue before you and that deals with the Bill of Rights. I do not propose to suggest that you should, or ought to, on the basis of the Bill of Rights declare this section to be inoperative or of no effect or null and void or ultra vires or anything of the sort. I would just ask you (to) read it in the sense or context of the exhortation that it makes to an adjudicator who is called upon to determine a question which is touched on by the Bill of Rights.

For the respondent:

The issue (according to counsel for the appellant) would be whether or not these were amounts payable in respect of children of the marriage, but the further requirement to obtain the deduction is that the taxpayer must be living apart from and separated pursuant to a divorce, judicial separation or a 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 throughout the remainder of the year. There is no evidence, unless my friend can introduce evidence that the taxpayer was separated pursuant to a divorce, judicial separation or written agree- ment in order for him to tall within the perimeters of the subsection to obtain the deduction.

The section refers to children of the marriage and it also refers to the fact that the payments are to be made to his spouse or former spouse. Now, it is my submission that children of the marriage and spouse have their ordinary everyday common law meaning in the absence of particular definitions prescribed by the Income Tax Act.

Section 252 on which my friend has relied refers to children of a taxpayer, which in that extended definition applies or includes illegitimate children of the taxpayer. But the plain fact here is that in order to obtain the support or maintenance deduction in section 60, paragraph (b) or even section 60, paragraph (c), the requirement that Parliament is placing is that the deduction must be in respect of payments to a spouse or on behalf of children of the marriage. If Parliament had simply wished to provide legislation in favour of the interpretation my friend is asking this Court to make, Parliament could’ve easily said to children of the taxpayer, but it didn’t. Parliament said children of the marriage and it referred also to spouse, which are at odds with and my friend says are incongruous. They are not incongruous in the sense that the extended meaning of the word child only applies where the word child of a taxpayer or words child of a taxpayer, but here Parliament is saying no, it must be children of the marriage.

. . . my friend referred to the application of the Ontario Family Law Reform Act in which, and he has drawn the Board’s attention to the definitions of the meaning of child in that Act and the meaning of spouse. I point out respectfully that paragraphs 60(b) and 60(c) of the Income Tax Act is not legislation whose purpose is, . . . or subject matter is child support in the province. The purpose and function and subject matter of the sections have to do with the Federal legislative power in relation to taxation. It is simply a deduction which Parliament has allowed taxpayers . . .

In the Jackson case (supra), there is no definition of children of the marriage and in my submission, the Court can only apply the common law everyday meaning prescribed to those words. If, as my friend suggests . . . this results in a hardship to this taxpayer or other taxpayers in his position,... The remedy that my friend is seeking . . . is only a remedy that the Parliament of Canada can give and if the Parliament of Canada sees fit to delete the words of the marriage and define the term spouse in these provisions to encompass what we may call a common law marital relationship, then that is something within the jurisdiction of Parliament, but given the legislation as it presently stands, then it must be interpreted in accordance with fair and proper principles of statutory construction . . .

Findings

I do not agree with the assertions implicit in the argument of counsel for the appellant that the significant phrase is “children of the marriage” rather than the term “marriage” itself. Taken to its bare essential, the proposition of counsel is the Board should hold that the word “marriage” in the Income Tax Act should not be limited to the “social institution by which a man and woman are legally united and establish a new family unit” (The LIVING WEBSTER Encyclopedic DICTIONARY of the English Language—1973-1974 Edition—THE ENGLISH LANGUAGE INSTITUTE OF AMERICA—Chicago) but rather it should be extended to include “any intimate union” (again from the same definition of “marriage” in THE LIVING WEBSTER (supra)). The argument put forward by counsel has been cogent and articulate, but it only serves to demonstrate that the word “marriage” may be subject to a wide range of perspectives, depending on the context in which it is found. However, this issue in the context of the Income Tax Act does not lend itself to resolution on the basis of such tangential support. To assert his claim to a reduction of income tax otherwise payable, it is not sufficient for the ap- pellant to demonstrate merely that the “marriage” to which he lays claim has some characteristics similar to those of a legitimized formal union. This indeed he has done. It is incumbent upon him to demonstrate the “marriage” has no characteristics which could place it outside the strictest parameters of such a legitimized formal union. Such a legitimized formal union would require, in my view, that the man and woman be “legally united and establish a family unit”. That is a narrow but clear definition of a marriage and, in my view, in dealing with an exempting provision in the Income Tax Act, the Board is bound to apply it unless and until there is clear indication from the Courts that some greater latitude is permissible.

Decision

The appeal is dismissed.

Appeal dismissed.