JACKETT,
P.:—This
is
an
appeal
by
the
Minister
of
National
Revenue
from
a
decision
of
the
Tax
Appeal
Board
allowing,
in
part,
an
appeal
by
the
respondent
from
his
assessment
under
the
Income
Tax
Act
for
the
1961
and
1962
taxation
years.
The
only
question
in
issue
in
the
appeal
to
this
Court
is
whether
the
Tax
Appeal
Board
was
in
error
in
holding
that
the
respondent
was
entitled,
by
virtue
of
Section
11(1)
(1)
of
the
Income
Tax
Act,
to
deduct,
in
the
computation
of
his
income
for
the
purposes
of
that
Act
for
each
of
those
years,
twelve
payments
of
$100
made
to
his
former
wife
pursuant
to
an
agreement
made
by
him
with
his
wife
before
they
were
divorced.
Section
11(1)
(1)
of
the
Income
Tax
Act,
in
so
far
as
it
is
relevant,
reads
as
follows:
11.
(1)
.
.
.
the
following
amounts
may
be
deducted
in
computing
the
income
of
a
taxpayer
for
a
taxation
year:
(1)
an
amount
paid
by
the
taxpayer
in
the
year,
.
.
.
pursuant
to
a
written
agreement,
as
.
.
.
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof
.
.
.
if
he
was
living
apart
from,
and
was
separated
pursuant
to
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
and
throughout
the
remainder
of
the
year;
There
is
no
dispute
as
to
the
facts.
It
is
common
ground
that
the
respondent
and
his
wife
entered
into
a
so-called
‘‘
Property
Settlement
and
Separation
Agreement’’
on
September
27,
1960,
and
it
is
common
ground
that
the
payments
in
question
were
made
by
the
respondent
in
accordance
with
the
terms
of
that
agreement.
The
only
question
is
whether
such
payments
fall
within
the
class
of
payments
the
deduction
of
which
is
permitted
by
Section
11(1)
(1).
This
question
depends
upon
a
proper
understanding
of
the
effect
of
the
agreement.
The
agreement
must
be
considered
as
a
whole
and
I
find
it
necessary,
therefore,
to
quote
a
large
part
of
it.
It
reads
in
part
as
follows:
1.
CONSIDERATION.
The
consideration
for
this
Agreement
is
the
mutual
promises
and
agreements
herein
contained.
2.
SEPARATION.
It
shall
be
lawful
for
each
party
at
all
times
hereafter
to
live
separate
and
apart
from
the
other
party
at
such
place
or
places
as
he
or
she
may
from
time
to
time
choose
or
deem
fit.
3.
NO
INTERFERENCE.
Each
party
shall
be
free
from
interference,
authority,
and
control,
direct
or
indirect,
by
the
other
party
as
fully
as
if
he
or
she
were
single
and
unmarried.
Neither
shall
molest
the
other,
or
compel
or
endeavor
to
compel
the
other
to
co-habit
or
dwell
with
him
or
her.
4.
WIFE’S
DEBTS.
The
Wife
represents
and
warrants
to
the
Husband
that
she
has
not
incurred
any
debts
or
made
any
contracts
for
which
the
Husband
or
his
estate
may
be
liable.
The
Wife
will
not
incur
any
such
debts
or
make
any
such
contracts
so
long
as
the
Husband
performs
all
of
his
obligations
under
this
agreement.
If
the
Wife
violates
this
provision,
and
as
a
result
thereof
the
Husband
is
obligated
to
make
a
payment
or
payments
to
others,
he
shall
have
the
right
to
deduct
the
amount
of
such
payment
or
payments
from
the
next
earliest
amounts
payable
to
the
Wife
under
this
Agreement.
5.
MUTUAL
RELEASE.
Subject
to
the
provisions
of
this
agreement
each
party
has
released
and
discharged,
and
by
this
agreement
does
for
himself
and
herself,
and
his
or
her
heirs,
legal
representatives,
executors,
administrators,
and
assigns,
release
and
discharge
the
other
of
and
from
all
causes
of
action,
claims,
rights,
or
demands,
whatsoever
in
law
or
equity,
which
either
of
the
parties
ever
had
or
now
has
against
the
other,
except
any
or
all
cause
or
causes
of
action
for
divorce.
6.
DIVISION
OF
PERSONAL
PROPERTY.
The
parties
have
divided
between
them,
to
their
mutual
satisfaction,
the
personal
effects,
household
furniture
and
furnishings,
and
all
other
articles
of
personal
property
which
have
heretofore
been
used
by
them
in
common,
and
neither
party
will
make
any
claim
to
any
such
items
which
are
now
in
the
possession
or
under
the
control
of
the
other.
7.
PAYMENT.
In
full
and
final
settlement
of
the
Husband’s
obligation
to
support
and
maintain
the
Wife
during
their
joint
lives,
the
Husband
agrees
to
pay
the
Wife
the
sum
of
Twenty-
Thousand
Dollars
($20,000.00)
in
lawful
currency
of
Canada,
as
follows
:
(1)
The
sum
of
Six
Thousand
Dollars
($6,000.00)
in
lawful
Canadian
currency
upon
execution
of
this
Agreement.
(2)
The
sum
of
Fourteen
Thousand
Dollars
($14,000.00)
by
equal
consecutive
monthly
instalments
of
One
Hundred
Dollars
($100.00)
each,
payable
on
the
First
(1st)
day
of
each
and
every
month,
in
each
and
every
year,
the
first
of
such
payments
to
become
due
and
be
paid
on
the
First
day
of
November,
A.D.
1960.
(3)
The
deferred
payments
hereinbefore
referred
to
shall
be
made
payable
to
the
wife
by
deposit
to
her
account
in
the
Royal
Bank
of
Canada,
Main
Branch,
Saskatoon,
Saskatchewan,
on
the
First
day
of
each
month
during
the
currency
of
this
Agreement.
(4)
In
the
event
of
any
other
payments
made
by
the
Husband
to
the
Wife,
the
balance
due
and
owing
will
be
reduced
proportionately.
8.
WAIVERS
OF
CLAIMS
AGAINST
ESTATE.
Except
as
herein
otherwise
provided,
each
party
may
dispose
of
his
or
her
property
in
any
manner,
and
each
party
hereby
waives
and
relinquishes
any
and
all
rights
she
or
he
may
now
and/or
hereafter
acquire,
under
the
present
or
future
laws
of
any
jurisdiction,
to
share
in
the
property
or
the
estate
of
the
other
as
a
result
of
the
marital
relationship,
including
without
limitation,
dower,
thirds,
curtesy,
statutory
allowance,
widow’s
allowance,
homestead
rights,
right
to
take
in
intestacy,
right
to
take
against
the
will
of
the
other,
and
right
to
act
as
administrator
or
executor
of
the
other’s
estate,
and
each
party
will,
at
the
request
of
the
other,
execute,
acknowledge,
and
deliver
any
and
all
instruments
which
may
be
necessary
or
advisable
to
carry
into
effect
this
mutual
waiver
and
relinquishment
of
all
such
interests,
rights,
and
claims.
9,
ACCEPTANCE
BY
WIFE.
The
Wife
acknowledges
that
the
provisions
of
this
agreement
for
her
support
and
maintenance
are
fair,
adequate,
and
satisfactory
to
her
and
in
keeping
with
her
accustomed
standard
of
living
for
her
reasonable
requirements.
The
Wife,
therefore,
accepts
these
provisions
in
full
and
final
settlement
and
satisfaction
of
all
claims
and
demands
for
alimony
or
for
any
other
provision
for
support
and
maintenance,
and
fully
discharges
the
Husband
from
any
such
claim
and
demands
except
as
provided
in
this
agreement.
10.
SUBSEQUENT
DIVORCE.
Nothing
herein
contained
shall
be
deemed
to
prevent
either
of
the
parties
from
maintaining
a
suit
for
absolute
divorce
against
the
other
in
any
jurisdiction
based
upon
any
past
or
future
conduct
of
the
other,
nor
to
bar
the
other
from
defending
any
such
suit.
In
the
event
any
such
action
is
instituted,
the
parties
shall
be
bound
by
all
the
terms
of
this
agreement.
If
consistent
with
the
rules
or
practice
of
the
Court
granting
a
decree
of
absolute
divorce,
the
provisions
of
this
agreement,
or
the
substance
thereof,
shall
be
incorporated
in
such
decree,
but,
notwithstanding
such
incorporation,
this
agreement
shall
not
be
merged
in
said
decree,
but
shall
in
all
respects
survive
the
same
and
be
forever
binding
and
conclusive
upon
the
parties.
11.
BREACH.
If
the
Husband
breaches
any
provision
of
this
agreement,
the
Wife
shall
have
the
right,
at
her
election,
to
sue
for
damages
for
such
breach,
or
seek
such
other
remedies
or
relief
as
may
be
available
to
her.
12.
ADDITIONAL
INSTRUMENTS.
Each
of
the
parties
shall
from
time
to
time,
at
the
request
of
the
other,
execute,
acknowledge,
and
deliver
to
the
other
party
any
and
all
further
instruments
that
may
be
reasonably
required
to
give
full
force
and
effect
to
the
provisions
of
this
agreement,
and
in
particular,
the
Wife
covenants
and
agrees
to
relinquish
her
Homestead
rights
in
property
known
as
the
Arrow
Confectionary
and
Barber
Shop,
situate
at
Civil
No.
616,
33rd
Street
West,
being
Lot
Eight
(8)
and
the
East
Eight
Feet
(8')
of
Lot
Nine
(9),
in
Block
Six
(6),
Plan
FU,
in
the
City
of
Saskatoon,
Province
of
Saskatchewan,
at
or
before
the
signing
of
this
Agreement;
AND
FURTHER,
the
Husband
covenants
and
agrees
with
the
Wife
that
notwithstanding
anything
contained
in
the
within
Agreement,
the
wife
has
the
right
to
register
a
Homestead
Caveat
against
the
property
known
as
Civic
No.
518
-
3rd
Avenue
North,
being
Lot
Ten
(10),
in
Block
One
Hundred
and
Eighty-four
(184),
Plan
Q13,
in
the
City
of
Saskatoon,
Province
of
Saskatchewan,
such
Homestead
Caveat
to
be
released
upon
payment
in
full
of
the
$14,000.00
as
aforesaid.
18.
BINDING
EFFECT.
Except
as
otherwise
stated
herein,
all
the
provisions
of
this
agreement
shall
be
binding
upon
the
representatives,
the
representative
heirs,
next
of
kin,
executors,
and
administrators
of
the
parties.
The
payments
in
question
are
the
twelve
monthly
payments
made
in
each
of
the
years
1961
and
1962
pursuant
to
that
part
of
paragraph
7
of
the
agreement
that
reads:
.
.
.
the
Husband
agrees
to
pay
the
Wife
the
sum
of
..
.
$20,000
.
as
follows:
(1)
The
sum
of
.
.
.
$6,000
.
.
.
upon
execution
of
this
Agreement.
(2)
The
sum
of
.
.
.
$14,000
.
.
.
by
equal
consecutive
monthly
instalments
of
.
..
$100
.
.
.
each
.
..
the
First
.
.
.
to
become
due
.
on
the
First
day
of
November,
A.D.
1960.
There
is
no
question
between
the
parties
that
each
of
the
payments
in
question
was
an
amount
paid
by
the
respondent
pursuant
to
a
written
agreement
on
a
periodic
basis;
there
is
similarly
no
doubt
that
the
payments
were
made
in
the
taxation
years
in
question;
and
finally
there
is
no
doubt
that,
at
the
time
the
payments
were
made
and
subsequent
thereto,
the
appellant
was
living
apart
from,
and
separated
pursuant
to
a
written
separation
agreement*
from,
his
spouse
or
former
spouse
to
whom
he
was
required
to
make
the
payments.
The
appellant’s
position
is,
however,
that
the
monthly
payments
in
question
were
not
made
‘‘as
.
.
.
allowance
payable
.
.
.
for
the
maintenance
of
the
recipient
thereof’’
and
for
that
reason,
and
that
reason
alone,
do
not
fall
within
the
class
of
amounts
the
deduction
of
which
is
permitted
by
Section
11(1)
(1).
The
appellant’s
position
that
the
monthly
instalments
of
$100
in
question
were
not
paid
as
‘‘allowances
payable
.
.
.
for
the
maintenance
of
the
recipient”,
as
I
understand
it,
was
based
on
the
following
submissions
:
(a)
that
such
monthly
payments
were
merely
payments
on
account
of
the
sum
of
$20,000,
which
is
what
counsel
for
the
appellant
describes
as
a
“lump
sum
payment”
that
the
appellant
bound
himself
by
the
agreement
to
pay,
and
the
lump
sum
payment
of
$20,000
was
either
the
consideration
for
settlement
of
all
the
wife’s
property
rights
and
for
a
release
of
all
the
obligations
of
the
appellant
to
his
wife
pertaining
to
the
marriage
relationship,
or
it
was
a
lump
sum
payment
in
relation
to
his
obligation
to
maintain
his
wife;
(b)
alternatively,
the
payments
were
payments
for
a
release
of
the
obligation
to
maintain
the
wife
and
were
not
made
as
allowances
for
her
maintenance;
and
(e)
alternatively,
the
payments
were
part
of
the
amount
payable
by
the
appellant
under
the
agreement
in
respect
of
the
wife’s
claims
in
respect
of
the
appellant’s
property,
her
rights
against
his
estate
and
her
right
to
maintenance,
and,
for
that
reason,
cannot
be
regarded
as
allowances
for
her
maintenance
within
Section
11(1)
(1).
The
preamble
of
the
agreement
shows
that
the
purpose
of
the
agreement
was
to
confirm
the
separation
of
the
parties
that
had
already
taken
place,
and
to
make
arrangements
in
connection
therewith,
including
(a)
arrangements
for
settlement
of
their
property
rights,
(b)
arrangements
for
the
support
and
maintenance
of
the
wife,
and
(c)
arrangements
in
respect
of
other
rights
and
obligations
growing
out
of
the
marriage
relationship.
When
the
substantive
provisions
of
the
agreement
are
examined,
it
is
found
that,
as
forecast
by
the
preamble,
the
agreement
does
‘‘make
arrangements’’
for
the
settlement
of
the
property
rights
of
the
parties.
For
example,
paragraph
6
records
and
confirms
a
division
that
had
taken
place
of
the
personal
property
that
had
been
used
by
them
in
common
and,
by
paragraph
8,
they
waived
all
rights
against
each
other’s
property
or
estates.
The
agreement
also
contains
many
provisions
making
arrangements
in
respect
of
other
rights
and
obligations
growing
out
of
the
marriage
relationship.
For
example,
paragraph
2
provides
for
their
living
separate
and
apart,
by
paragraph
3
they
agree
not
to
interfere
with,
or
molest,
each
other,
paragraph
4
absolves
the
appellant
from
liability
for
the
wife’s
debts,
and,
by
paragraph
5,
they
mutually
release
each
other
from
all
legal
obligations
one
might
have
had
against
the
other.
Finally,
as
forecast
by
the
preamble,
the
agreement
contains
a
provision
which,
in
my
view,
was
intended
as
‘‘arrangements’’
for
‘‘the
support
and
maintenance
of
the
wife’’.
I
refer.
of
course,
to
paragraph
7.
If
there
could
have
been
any
doubt
that
paragraph
7,
read
by
itself,
is
a
provision
for
the
maintenance
of
the
wife
(by
reason
of
the
use
of
the
rather
inept
language
‘‘In
full
and
final
settlement
of
Husband’s
obligation
to
support
and
maintain
the
Wife
.
.
.’’
instead
of
some
more
appropriate
words
such
as
“For
the
support
and
maintenance
of
the
Wife
.
.
.’’),
and
I
am
not
to
be
taken
as
suggesting
that
there
could
have
been
any
such
doubt,
when
paragraph
7
is
read
with
the
preamble
and
with
the
reference
in
paragraph
9
to
‘‘the
provisions
of
this
agreement
for
her
support
and
maintenance’’,
there
cannot,
in
my
view,
be
any
doubt
that
paragraph
7
provides
exclusively
for
the
maintenanece
of
the
wife.
A
supplementary
argument
was
made
for
the
appellant
that
paragraph
7
payments
cannot
be
regarded
as
allowances
for
maintenance
within
Section
11(1)
(1)
because
they
lack
certain
characteristics
of
provisions
for
the
maintenance
of
a
wife.
Reference
was
made,
for
example,
to
the
fact
that
the
amounts
are
not
expressed
to
be
payable
during
the
wife’s
life,
the
fact
that
the
husband
is
permitted
to
make
prepayments,
and
the
fact
that
the
payments
are
assignable.
Some
such
considerations
may
be
helpful
in
certain
cases
in
deciding
whether
particular
payments
are
to
be
made
for
the
wife’s
maintenance
or
not.
I
do
not,
however,
find
any
of
the
factors
upon
which
counsel
for
the
appellant
relied
for
that
purpose
in
this
case,
to
the
extent
that
they
seemed
to
exist,
to
be
inconsistent
with
the
conclusion
that
I
have
reached
that
the
agreement
read
as
a
whole
points
clearly
to
the
conclusion
that
the
parties
intended
the
paragraph
7
payments
to
be
provision
for
the
wife’s
maintenance.
With
reference
to
the
contention
that
the
payments
were
really
part
of
the
consideration
running
from
the
appellant
under
the
agreement
for
all
the
various
benefits
accruing
to
him
under
the
agreement,
I
have
already
made
it
clear
that,
as
I
read
the
agreement,
it
has
been
so
constructed
so
as
to
make
paragraph
7
a
provision
for
maintenance
and
nothing
else.
Finally,
I
reject
the
contention
that
paragraph
7
provides
for
a
‘lump
sum
payment’’
of
$20,000
and
that
the
monthly
payments
in
question
are
merely
payments
on
account
of
that
lump
sum.
Quite
the
contrary,
in
my
view,
paragraph
7
provides
for
a
number
of
payments
totalling
$20,000
and
the
monthly
payments
in
question
are
some
of
the
payments
so
provided
for.
A
reference
to
the
words
of
the
paragraph
makes
it
quite
clear.
It
says,
“the
Husband
agrees
to
pay
the
Wife
the
sum
of
.
.
.
$20,000
.
..
as
follows
’
’,
and
then
it
sets
out
the
actual
payments
that
are
to
be
made.
The
real
question
is,
of
course,
whether
the
payments
were
made
pursuant
to
a
provision
for
payments
on
a
periodic
basis
and,
in
my
view,
paragraph
7(2),
pursuant
to
which
the
payments
in
question
were
made,
is
precisely
that.
The
appeal
is
dismissed
with
costs.
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