Addy, J:
1 This is an appeal by the Minister of National Revenue from a decision of the Tax Review Board that certain expenses, which were paid during the year 1970 pursuant to a court order, by the defendant on behalf of his wife and children, were deductible from the income of the defendant pursuant to paragraph 11(1)(l) of the Income Tax Act, RSC 1952, c 148. The payments challenged by the plaintiff were those made to cover medical expenses as well as heating and electrical bills. The defendant counter- claimed for the right to deduct what he described as the costs of rental. Paragraph 11(1)(l) of the Income Tax Act is reproduced hereunder for the purpose of convenience:
11. (1) Notwithstanding paragraphs (a), (b) and (h) of subsection (1) of section 12, the following amounts may be deducted in computing the income of a taxpayer for a taxation year:(l) 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.
2 The relevant portions of the judgment of the Superior Court of the Province of Quebec, dated July 31, 1970, read as follows:
[TRANSLATION]
Authorizes plaintiff-petitioner to continue to live in the matrimonial domicile at 554 Vachon Street, City of LaSalle;
AWARDS custody of her three minor children, Nicole, Francine and Bernard, to plaintiff-petitioner;
REQUIRES defendant-respondent to pay expenses connected with the real estate occupied by petitioner, namely monthly payments of capital and interest, insurance, maintenance, heating and electricity;
ALSO REQUIRES defendant to pay the medical expenses of plaintiff- petitioner and of the children;
ORDERS defendant-respondent to pay plaintiff-petitioner for maintenance the sum of $55.00 weekly ...
3 The only other relevant facts are that the defendant is separated from his wife, that the separation took effect as of August 1, 1970, that the defendant is the sole owner of the house in which the wife and children are living, and that the expenditures challenged by the Minister of National Revenue were made solely for the benefit of the wife and the children who were living with her.
4 At the opening of the hearing, the plaintiff requested the right to amend the statement of claim in order to be able to contest not only the right to deduct the amounts found to have been paid but also to contest the quantum and the relevancy of the amounts themselves. The right to amend was granted, although I remarked at the time that it was improper for the plaintiff to wait until the date of the trial to request such an amendment because the amounts had not been questioned in any way before the Tax Review Board and also because the details of such amounts should have been determined if possible before the case reached this Court, with resulting high court costs and extensive public expenditure for the recovery of such minimal amounts as were involved in the present case. In its judgment,[FN1: <p><em>Guay v. MNR</em>, dated October 10, 1973, signed by Lucien Cardin, Assistant Chairman, reported[1973] C.T.C. 2279 at 2280–81.</p>] the Tax Review Board stated as follows:
At no point did the respondent question the accuracy of the amount appellant claimed to have spent for the maintenance of his wife and children and the Board concludes that the said amount is not under dispute in the present case.
5 After hearing evidence as to the various payments made, immediately after the conclusion of argument, I orally made my findings as to the amounts and the reasons for making the findings. They were recorded by the Court Reporter and no useful purpose will be served by repeating them here. Suffice it to say that I found that the total medical accounts paid amounted to $146.35 representing $60 for doctors' fees and $86.35 for pharmaceutical bills. The heating paid during the period amounted to $19 and the electricity to $62.70. There was no proof of any payment made by the defendant for rental. He gave evidence as to what rents he could have received had the house been rented and also evidence as to the insurance, the cost of upkeep and the payments made on account of capital and interest on the mortgage on the house.
6 It would be more convenient to deal in the first place with the counter- claim of the defendant. The claim for loss of rental is obviously not allowable as it is only an estimated loss of revenue and is not a payment made nor was it made to or on behalf of the wife nor was it made pursuant to the judgment. The payments for capital and interest on the mortgage, insurance on the house and expenditures for repairs, although made pursuant to the judgment, were not of their very nature expenditures for the maintenance of the wife or the children of the marriage but were expenditures incurred to either increase or to preserve and protect the defendant's capital investment in the real estate.
7 As to the headings contested by the plaintiff, in arriving at the above- mentioned amounts for medical expenditures as well as electricity and heating bills, I disallowed certain sums because in certain cases, although the amounts were paid during the relevant period, that is, during the last five months of 1970, they in fact related to expenditures previously incurred and, in other cases, although relating to expenditures incurred during the relevant period, the amounts were actually paid by the taxpayer during 1971 and must, if deductible, be deducted from the income earned in that year. In order to comply with the section the payment must be made within the taxation year and also relate to expenditures incurred during the period of a financial year during which the taxpayer was legally separated from his wife and also relate to expenditures which were paid pursuant to a judgment or a written separation agreement affecting that period of time.
8 Dealing next with the plaintiff's claim from a legal standpoint, one must bear in mind that it has long been established that in a taxing statute the intention to exempt must be expressed in clear, unambiguous language. Taxation is the rule and exemption the exception and the latter must therefore be strictly construed. The principle was expressed in these terms by Sir W J Ritchie, CJ in Wylie v City of Montreal (1855), 12 S.C.R. 384 at 386. The rule was reiterated by the President of the Exchequer Court in Lumbers v Minister of National Revenue, [1943] C.T.C. 281 at 290, 2 D.T.C. 631.
9 The argument of the plaintiff centred around the nature of the payments and the fact that they were not made directly to the wife but to a third party such as a doctor or a pharmacist. As to the nature of the payment, it is obvious that a lump sum payment does not qualify. In MNR v Trottier, [1968] C.T.C. 324, 68 D.T.C. 5216, the husband, pursuant to a separation agreement, inter alia, gave his wife a second mortgage of $45,000 as a lump sum payment by way of a property settlement and in discharge of all obligations present and future. The Supreme Court of Canada, in that case, held that as the granting of the mortgage constituted a lump sum payment in final settlement and not a periodic payment of moneys and as the mortgage payments, unlike alimony, will continue after the death of the wife, the payment of $45,000 did not qualify under the section. The same result had been arrived at by the Tax Appeal Board in 1966 in the case of Cussion v. MNR, 41 Tax A.B.C. 48, 66 D.T.C. 297.
10 In the case of MNR v J J Armstrong, [1967] S.C.R. 446, [1956] C.T.C. 93, 56 D.T.C. 1044, which was also cited by counsel for the plaintiff in support of his argument, the Supreme Court of Canada, in that case, held that where a husband had been ordered to pay $100 per month as maintenance for the daughter and where the wife subsequently accepted a sum of $4,000 in full settlement of all future payments, the amount of $4,000 was not deductible. The case was clearly decided on the basis that the amount was not paid pursuant to a court order and was a lump sum payment.
11 The Tax Appeal Board in the case of C E Brown v. MNR (1964), 37 Tax A.B.C. 86; held that a lump sum payment of arrears of alimony paid pursuant to an order of the Supreme Court of Ontario, under which the taxpayer was ordered to pay up the arrears, was not deductible as a periodic payment as it was a lump sum payment. This was approved on appeal by my brother Cattanach, J, the case being reported in[1965] C.T.C. 302.
12 The same conclusion was arrived at in Cooey v. MNR, 6 Tax A.B.C. 138, 52 D.T.C. 132, as to $10,000 ordered to be paid when a divorce decree became absolute.
13 There is no question in the present case of the payments which were challenged by the plaintiff being lump sum payments as they are all payments of expenses which of their very nature are bound to recur periodically. Furthermore, in order to constitute periodic payments there is no requirement that the time elapsing between each payment be of equal duration, the time between each payment may well vary and be quite unpredictable, yet, the payments may still be characterized as periodic. Periodic indicates something which recurs from time to time but not necessarily at precise or regular intervals. It is used, in this sense in the section, when applied to payments, as opposed to lump sum or final settlement payments. The payment of the medical and pharmaceutical expenses, which occurred from time to time, and the payment of electrical bills and heating bills, which might or might not cover regular periods, qualify as periodic payments under the section.
14 As to the question of payments not being made to the wife directly, some benefit might be derived from reviewing the reported decisions.
15 It has been held on two occasions by the Tax Review Board that a payment to a third party on behalf of the children does not qualify. In No 302 v. MNR, 14 Tax A.B.C. 170, 55 D.T.C. 653, it was stated at page 172 [654] that a payment made to a third party acting as trustee on behalf of the children did not fall within the terms of the section because the payments had not been made to the wife for the children but to a third party for the children.
16 The same result was arrived at in Foisy v. MNR (1962), 29 Tax A.B.C. 243, 62 D.T.C. 305, where it was held that a payment directly to a school for the support and education of the children made pursuant to a separation agreement did not qualify, as the payments were not made to the wife so as to be taxable in her hands under paragraph 6(1)(d). Without commenting as to whether I agree with the ultimate result of this case, I do not hesitate to state that I do not at all agree with the principles on which the decision was apparently founded on which were urged upon me by counsel for the plaintiff in the case at bar. It is true that any word or expression in a statute must be construed in the light of the statute as a whole. However, in construing any part of a taxing statute, and even an exempting section in a taxing statute, in order to determine how it should affect a particular taxpayer, it is not at all proper to consider whether the taxing authority will be able to recover the tax on that amount from another taxpayer and then considering the section in the light of a principle that the taxing authority must not be deprived of revenue which it should receive from either one taxpayer or the other, and that, therefore, either one section or the other must be interpreted against one of the taxpayers: it is up to the taxing authority to formulate a law so that either one or the other, or even both of the taxpayers are liable and not up to the courts to decide the case on the basis of a principle that the taxing authority should not be totally deprived of revenue from any particular source. It is not up to the courts to assume, on behalf of the Minister of National Revenue, the role of Solomon as between two taxpayers.
17 In the case of Foxcroft v. MNR (1963), 33 Tax A.B.C. 415, 63 D.T.C. 915, it was held that monthly payments on account of principal and interest on a house jointly owned by the taxpayers did not qualify for exemption under the section. In this case, however, the payment was not made pursuant to a court order nor pursuant to any agreement in writing, although the Judge in ordering monthly payment of $40 to be made to the wife (which payments were in fact recognized by the Department of National Revenue as being deductible) took into account the fact that the husband had given a verbal undertaking at the trial to also keep up the mortgage payments. The ratio decidendi in this case was that a payment under such a verbal undertaking, even under oath, was not a payment made pursuant to a court order as the order did not stipulate that he was bound to make it. Furthermore, as in the case at bar, I feel that such payments which essenally contribute to the protection and the growth of a capital investment either of the taxpayer or of his wife or of both, are not truly maintenance payments and not the type of disbursements contemplated by the section.
18 In the case of MNR v Sproston, [1970] C.T.C. 131, 70 D.T.C. 6101, which dealt with the same problem, Sheppard, DJ of this Court held that payments made by a taxpayer directly to each of the four children by separate cheques instead of to the wife did not qualify for exemption. In that case, the taxpayer was obligated under court order to make payments to the wife for alimony and also to make payments directly to her for the support of the four children. Instead of doing so, he chose to pay for the support of the children by making separate cheques directly to them.
19 My brother Sheppard held (p 133 [6102]) that:
The payments to the children are not “pursuant to” the order for the following reasons:(1) The obligation is to pay all the moneys to the wife, the plaintiff in the action, and she alone could enforce the order to pay, hence, literally, the order requires that the payments be made to the wife.
20 But after reviewing the authorities, he also held at page 137 [6104] as follows (dealing with paragraph 11(1)(l)):
It follows that the section requires the payments to be made to the wife before they may be deducted by the respondent as taxpayer. That has not been done, therefore, the respondent is not permitted to deduct the payments made to the children.
21 If the learned judge by this last-mentioned statement, as argued by counsel for the plaintiff in the case before me, intended to enunciate a principle to the effect that no payment of any kind which is not made directly to the wife would qualify for exemption under the section, then I refuse to follow this ruling. But I do not feel that the learned judge intended to go that far; he was making the statement with due regard to the manner in which the payments were made by that particular taxpayer. It is trite to say that any pronouncement on the law must always be read in the light of the particular facts of the case and, in the Sproston case (supra) it must be borne in mind that the payments were made in such a manner as to jeopardize the maintenance of the children themselves for the report indicates that the wife would have been unable to maintain the children had she not been able to convince them to turn over to her the money paid to them individually; the payments were also made in contravention of the court order and not in accordance with it, furthermore, they were not made in order to satisfy a service ordered by the wife nor to satisfy a debt incurred by her. The true ratio decidendi was the first quoted extract from the judgment, the second being in substance obiter dictum, for it was not at all required in order to decide the case.
22 In the case before me, the three types of payments in issue were all made strictly in accordance with the court order; they were made to satisfy expenditures which cannot be qualified as anything else but for the support and maintenance of the wife and children; they were made to satisfy debts for services which she ordered and for which she would be personally liable if not paid.
23 It is to be noted also that under the terms of the order the taxpayer must pay these expenses and it is certainly debatable whether a payment to the wife would, in fact, constitute a compliance with the order, at least insofar as the children are concerned, should the wife decide to use the money for other purposes and not pay the expenses, nor would the husband, in such circumstances, be discharged from liability to third parties who might have supplied the services on the basis that they had full knowledge of the order and were relying on the fact that the husband was directly liable for payment of same.
24 The court order was made for the benefit of the wife as plaintiff and applicant for the relief sought and the fact that the husband was obliged to pay those maintenance expenses directly was to her direct advantage as it relieved her from the necessity of having to first find the money to pay them and then claim reimbursement from the husband.
25 I therefore find that in the circumstances of this case, the payments made by the husband and contested by the Plaintiff constitute in essence payment to the wife in compliance with the section. I cannot interpret the section to mean that the legislators intended that if, in compliance with a court order, a taxpayer made payments for the maintenance and support of his wife and children he would not benefit from the exemption on the grounds that he did not make the cheques directly payable to the wife in reimbursement for these expenses. Although an exemption provision must be interpreted strictly it must not be interpreted in such a way that one must conclude that the legislators, when enacting it, were completely devoid of reason and common sense; if a slavish adherence to the strictest interpretation possible would result in utter nonsense then a more reasonable interpretation must be applied.
26 Counsel for the plaintiff also argued that, as the Government in the budget this fall announced its intention to change the law by enacting a new provision which would allow for the right to deduct any payment made to a third party, I should take this announced proposal in the change of the law as evidence of the original intention of Parliament when it enacted paragraph 11(1)(l), to not allow for such a deduction.
27 In the first place, a subsequent enactment cannot be used as evidence of what the intention of Parliament was when the original law was passed. A fortiorari an announcement in Parliament of an intention to pass such a law and the apparent motivation behind the proposal is not acceptable as evidence of the intention of Parliament in regard to the original enactment any more than are the statements of Ministers or of the Members of Parliament made before the actual passing of the original enactment itself. Enactments often are passed not to modify the law but merely to clarify a previous enactment or to restate a principle which may not have been clearly defined in the original enactment.
28 Counsel for the plaintiff argued that the medical expenses in the amount found, that is $146.35, could not be claimed as an exemption by reason of the fact that, pursuant to paragraph 27(1)(c), a taxpayer may deduct only such expenses as are in excess of 3% of his income for the taxation year.
29 The expenditures made by the defendant in this action, including the above-mentioned medical ones, are obviously not claimed as exemptions under paragraph 27(1)(c) nor would the ones claimed as medical expenditures necessarily well qualify under that section. They are claimed as maintenance payments pursuant to paragraph 11(1)(l).
30 The conditions which must prevail in order that disbursements may qualify as a deduction are completely different in the case of the former subsection than in the case of the latter. For example, under paragraph 27(1)(c) the payments need not be made under the compulsion of a judgment, court order or written agreement, nor made while the spouses are living separate and apart, nor need the payments cover a liability actually incurred during the portion of a year when the spouses were living apart, in the event of their not having been separated during the entire taxation year, nor need the payments be made to the wife nor are they limited to the medical expenses of the wife and the children but they include those of the taxpayer himself, etc. Briefly, the basis for exemption under paragraph 11(1)(l) is compulsory maintenance of the wife and children while in the case of paragraph 27(1)(c) the exemption is founded on bona fide medical expenditures as specifically provided for in the section having been made and being supported by receipts.
31 There is no provision in section 11 or anywhere else in the Act which would have the effect of making that section in any way dependent upon or subject to paragraph 27(1)(c) nor is there any provision in the latter section which might make it applicable to any medical expenses other than those actually claimed under its exemption provisions. In other words, not only are all the exemption provisions in both sections based on entirely different considerations, but the sections themselves are entirely different and are not expressed in any way to be interdependent.
32 I therefore conclude that the deduction of 3% of net salary provided for in paragraph 27(1)(c) does not apply to the amount of medical expenses found by me to fall under the exemption provisions of paragraph 11(1)(l).
33 Subject to the variations as to the amounts to which I have referred, the finding of the Tax Review Board is confirmed and the matter will be referred back to reassessment with the following amounts to be assessed as deductible under paragraph 11(1)(l), namely: medical payments $146.36, heating $19 and electricity $62.70.
34 There will be no costs. Judgment shall issue accordingly.
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