Arthur Pitman v. Minister of National Revenue, [1953] CTC 15

ANGERS, J.:—This appeal, which is taken from the Income Tax Appeal Board’s decision of January 9, 1952, regarding the appellant’s income tax assessment for the year 1949, deals with a claim of exemption by appellant with respect to payments made by him under the terms of a separation agreement entered into with his wife on October 9, 1929.

In his notice of appeal, dated August 3, 1951, a copy whereof froms part of the record of the Department of National Revenue, the appellant states in substance that : at all times material he resided in Canada and lived separate and apart from his wife, Doris Pitman, under a separation agreement reading in part thus :

“WHEREAS differences have arisen between the said Arthur Pitman and Doris Pitman, his wife, and they have consequently agreed to live separate from each other for the future and enter into such arrangements as are hereinafter expressed.

AND WHEREAS it has been agreed between the parties hereto that the said Party of the First Part will pay to the Party of the Second Part the sum of Twenty-one Thousand ($21,000) Dollars in full settlement of all claim or claims which the said Party of the Second Part now has or which she may hereinafter have against him or his Estate.

AND WHEREAS the said parties to this Agreement have two children both now being at the age of eight years.

NOW THIS AGREEMENT WITNESSETH that in pursuance of the premises and in consideration of the covenants hereinafter expressed on the part of the said Doris Pitman, the said Arthur Pitman hereby covenants and agrees with the said Doris Pitman that the said Doris Pitman shall and may at. all times hereafter notwithstanding her marriage and coverture live separate and apart from the said Arthur Pitman as if she were a feme sole and shall henceforth be free from the control or authority of the said Authur Pitman; and that the said Arthur Pitman will not at any time hereafter require her to live with him and will not molest or interfere with the said Doris Pitman in any manner whatsoever. And that the said Arthur Pitman will pay to the said Doris Pitman for the maintenance of herself and the children the sum of Twenty-one Thousand ($21,000.) Dollars with interest thereon at the rate of 514% per annum, said sum and interest being payable as follows:

(a) The sum of One Thousand ($1,000.) Dollars in cash upon the execution of these presents, the receipt whereof is hereby acknowledged.

(b) Interest at the rate of 514% per annum on the balance from time to time due; said interest to be payable on the First day of February and the First day of August in each and every year until the full sum of Twenty-one Thousand ($21,000.) Dollars be paid.

(c) The principal is to be payable in half yearly instalments of Two Hundred and Fifty ($250.) Dollars on the First day of February, 1929, and the balance on the First day of August, 1949.

(d) Said moneys are to be paid to the said Doris Pitman personally by cheque mailed to her at such Post Office address as she may from time to time direct.

The said Doris Pitman is to have all the household furniture and furnishings at present in the home heretofore occupied by them, with the exception of the oak chiffonier, to use and dispose of same as she may deem best.

The said Doris Pitman is to have the custody and control of the children and shall properly care for, maintain and educate them, but if she at any time hereafter shall fail to properly care for, maintain and educate the children, the said Arthur Pitman shall have the right to their custody and the said Doris Pitman hereby covenants and agrees in such event, to relinquish any claim that she may have for the custody of the said children.

IT IS FURTHER UNDERSTOOD AND AGREED that the said sum is accepted by the said Doris Pitman in full of all claims which she now or may hereafter have against the said Arthur Pitman and his wife or against the Estate of the said Arthur Pitman at his decease. And the said Doris Pitman hereby relinquishes all her interest in the Estate of the said Arthur Pitman upon his decease, except as hereinafter provided.

AND IN FURTHER CONSIDERATION of the premises, the said Doris Pitman covenants and agrees with the said Arthur Pitman that she will at all times hereafter indemnify and save harmless the said Arthur Pitman from and against all liabilities hereafter contracted or incurred by the said Doris Pitman with respect to herself or to the children and against all actions, claims and demands on account thereof. And in case the said Arthur Pitman shall at any time be called upon to pay, and shall actually pay any doctors’ bills, hospital bills, medical attendances or any other debt or debts hereinafter incurred by the said Doris Pitman on behalf of herself or of the children, then, and in every such case, the said Arthur Pitman may retain out of the sum payable hereunder, the full amount of such debt together with all expenses incurred by him in connection with the same.

IT IS FURTHER AGREED that if the said Doris Pitman at any time be guilty of misconduct which would disentitle her to alimony or which would entitle the Party of the First Part to a divorce, then this Agreement shall become null and void and the Party of the Second Part be not entitled to receive any further payment of any kind whatsoever from the said Party of the First Part.

AND the said Doris Pitman covenants and agrees that she or any person on her behalf, shall not, nor will, at any time hereafter, commence proceedings to compel the said Arthur Pitman to cohabit with her and she shall not, nor will she molest the said Arthur Pitman in any manner.

IT IS FURTHER UNDERSTOOD AND AGREED between the parties hereto that the said Arthur Pitman shall have access to the said children and to see them at least once each and every week.

AND IT IS FURTHER AGREED that the said Doris Pitman shall continue to reside in Canada and shall not remove to any other country without the consent in writing of the said Arthur Pitman, it being understood and agreed that the children shall remain in Canada and be brought up as Canadian citizens.

THE said Arthur Pitman shall also have the privilege at any time, without notice or bonus, to pay to the said Doris Pitman the full balance due to her at the time of such payment.

AND IT IS FURTHER AGREED that if the said Arthur Pitman and the said Doris Pitman shall at any time hereafter by mutual consent agree to cohabit as man and wife, then in such case, this Agreement shall become null and void and the moneys payable hereunder absolutely cease.

The said Arthur Pitman must at all times be advised of the address and residence of the said Doris Pitman and of the children.

IF the said Doris Pitman shall at any time fail to comply with the provisions of this Agreement, or any of them, then the payments herein to be made shall be suspended until the omission be rectified. Such suspended payments shall not bear interest after such default.

IN the event of the death of the said Arthur Pitman at any time prior to the First day of August, A.D. 1949, this Agreement shall nevertheless be continued and executed in accordance with the terms hereof by the Executors or other personal representatives of the said Arthur Pitman.”

The said Doris Pitman covenanted not to assign this agreement or any of the money payable thereunder unless her husband approved the assignment.

It was further agreed that the action commenced by the said Doris Pitman against her husband shall be immediately discontinued, the said Doris Pitman agreeing to pay the costs in connection therewith.

The agreement sets forth that the appellant paid the amount of $1,000. and the half-yearly instalments of $250. plus interest as provided for by the said agreement.

It is further stipulated that on February 1, 1949, the appellant paid his wife $552.56, i.e. the half-yearly instalment becoming due on the said date together with $302.56 interest, and on August 1, 1949, an amount of $11,045.63, being the balance due on the sum of $21,000. he agreed to pay his wife.

In his notice of appeal the appellant states that in his income tax return for the year 1949 he deducted from his income the sums of $552.56 and $11,045.63 paid to his wife in that year.

The notice of appeal alleges that by an assessment dated March 28,1951, the respondent disallowed the said deductions of $552.56 and $11,045.63 and levied a tax of $3,314.31 in respect of appellant’s income for the taxation year 1949. It further says that the appellant appealed to the Income Tax Appeal Board and that the appeal was dismissed at the sitting thereof in Regina, Saskatchewan, which commenced on December 4, 1951, on the ground that the lump sum of $21,000. which the appellant agreed to pay under the terms of the said agreement was not an amount within the meaning of paragraph (j) of subsection (1) of Section 11 of the Act.

The notice of appeal then states that on January 15, 1952, the Registrar of the said Board mailed him a eopy of the minutes of the judgment dismissing the said appeal. It goes on to say that the statutory provisions upon which the appellant relies read thus :

“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

(j) an amount paid by the taxpayer in the year pursuant to a decree, order or judgment of competent tribunal in an action or proceeding for divorce or judicial separation or pursuant to a written separation 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 is living apart from the spouse or former spouse to whom he is required to make the payment, 11

In his reply the respondent alleges :

He admits the allegations contained in paragraphs 1, 3, 4, 9, 6 and 7 of Part A of the notice of appeal ;

he denies the allegations contained in paragraph 2, except where hereinafter expressly admitted;

he admits that the appellant is and has been at all times relevant herein living separate from his wife Doris Pitman and that they entered into the agreement quoted in paragraph 2 of Part A in the notice of appeal;

he denies the allegations contained in paragraphs 1, 2 and 3 of Part B of the notice of appeal, except where hereinafter expressly admitted ;

he admits that the agreement alleged in paragraph 2 of said Part B of the notice of appeal was in writing ;

the respondent intends to rely upon the following statutory provisions :

“ (6) The two payments made by the appellant to his wife in the 1949 taxation year in the total amount of $11,598.19 do not constitute a proper deduction from income since they merely represent the balance with interest of the amount of $21,000.00 payable by the appellant pursuant to the agreement of 9th October, 1929, between himself and his wife, which amount of $21,000.00 does not constitute alimony or an allowance for maintenance as provided for by the provisions of para- graph (j) of subsection (1) of section 11 of the Income Tax Act.

(7) On the contrary, according to the terms of the said agreement, the said payment of $21,000.00 is a capital payment in full settlement of all claims whether alimentary or otherwise, present or future, which appellant’s wife, Doris Pitman, and their children might have had against him or his estate.

(8) The spreading of the payment of the said capital amount of $21,000.00 over a pre-determined period of years, as set forth in the said agreement, does not constitute the periodic basis contemplated by paragraph (j) of subsection (1) of section 11 of the Income Tax Act for payments of an alimentary nature.

(9) The two amounts totalling $11,598.19 disallowed as a deduction from income in the 1949 taxation year, being the final instalments with interest of the said payment of $21,000.00, partake of the nature of the said amount and constitute a capital payment in that year.

(10) The appellant’s income for the taxation year 1949 has been properly assessed under the provisions of the Income Tax Act.”

On April 10, 1951, the appellant sent to the Minister a notice of objection with a statement of further facts and reasons.

On May 11, 1951, a notification was issued by the Minister under Section 53 of the Act, in which it is alleged that the latter, having reconsidered the assessment and the facts and reasons set forth in the notice of objection, hereby confirms the said assessment as having been made in accordance with the provisions of the Act, particularly on the ground that the amount of $11,598.19 claimed as a deduction from income does not come within the provisions of paragraph (j) of subsection (1) of Section 11 of the Act.

The appeal was dismissed by the Income Tax Appeal Board on January 9, 1952. The reasons for judgment, written by Fabio Monet, Chairman of the Board, after relating the agreement of separation aforesaid, contains, among others, these statements :

“It has been proven that the appellant has paid the amount of $1,000.00 cash mentioned in the agreement and the half yearly instalments of $250.00 plus interest, as provided for by the said agreement.

On February 1st of the taxation year 1949, the appellant paid to his wife an amount of $552.56, that is the half yearly instalment payable on that date and interest to the extent of $302.56, and an August 1, 1949, an amount of $11,045.63, that is the balance then due on the principal of $21,000.00 he had agreed to pay his wife, plus the interest.

In his income tax return for the taxation year 1949, the appellant deducted from his income the two amounts paid to his wife during that year. This deduction was disallowed by the Minister of National Revenue, who assessed the appellant accordingly. Paragraph (j) of subsection (1) of Section 11 of the Income Tax Act reads as follows:

‘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 yaar

(j) an amount paid by the taxpayer in the year pursuant to a decree, order or judgment of a competent tribunal in an action or proceeding for divorce or Judicial separation or pursuant to a written separation 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 is living apart from the spouse or former spouse to whom he is required to make the payment’.

The appellant submitted that the amounts paid by him to his wife during the taxation year 1949 were amounts paid pursuant to a written separation agreement as alimony or other allowance payable on a periodic basis for her maintenance and the maintenance of the children of the marriage and that under the provisions of paragraph (j) of subsection (1) of Section 11 of the Income Tax Act (supra) he was entitled to deduct the amounts in question from his 1949 income.

The Minister submitted that the amount of $21,000.00 which the appellant agreed to pay to his wife under the terms of the agreement was not an amount for alimony or an allowance payable on a periodic basis for the maintenance of his wife and children, but an amount of capital in full settlement of liabilities present and future and that paragraph (j) of subsection (1) of Section 11 of the Act did not apply.

The agreement to be interpreted in this case is a very peculiar one. There is no doubt that it is a separation agreement. The true nature of the obligation for the payment of $21,000.00 therein mentioned, however, is not easy to determine. There are many clauses in the agreement which tend to indicate that it is an obligation of an alimentary nature and there are many other clauses which tend to indicate that the oligation assumed by the appellant was a general obligation whereby, inasmuch as his wife and children were concerned he would be freed from all liabilities present or future whether of an alimentary nature or of any other nature.

It must be remember that the appellant is seeking the benefit of an exemption and that he cannot succeed unless he falls squarely under the terms of the exempting section which, in this case, is Section ll(l)(j). After much hesitation, I must admit, I have come to the conclusion that the lump sum amount of $21,000.00 which the appellant agreed to pay under the terms of the agreement dated October 9, 1929, is not an amount within the meaning of paragraph (j) of subsection (1) of Section 11 of the Act and therefore the appeal is dismissed.”

It appears from the memorandum of facts and appellant’s argument that the appellant resided in Canada at all times relevant to this appeal and lived separate and apart from his wife under a separation agreement dated October 9,1929, and that he made the payments provided for in the said agreement, including the payment of $552.56 on February 1, 1949, and $11,045.63 on August 1,1949, and that in his tax returns or the taxation year 1949 he deducted from his income the payments just referred to.

By an assessment dated March 28, 1951, the respondent disallowed the two amounts as deductions and levied a tax of $3,314.31 in respect of the appellant’s income for the taxation year 1949.

The appellant appealed the said assessment to the Income Tax Appeal Board and the appeal was heard at a sitting thereof at Regina, Saskatchewan, which commenced on December 4, 1951.

The appellant claims the right to deduct the payments in question under the provisions of paragraph (j) of subsection (1) of Section 11 of the Income Tax Act, 1949, reading as follows :

“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

(j) an amount paid by the taxpayer in the year pursuant to a decree, order or judgment of competent tribunal in an action or proceeding for divorce or judicial separation or pursuant to a written separation 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 is living apart from the spouse or former spouse to whom he is required to make the payment.”

The appellant contends that the said sums are deductible for the reason that they are sums paid by him pursuant to a written separation agreement as alimony or other allowance payable on a periodic basis for the maintenance of his wife and the children of the marriage.

Appellant’s memorandum of facts and arguments set forth that it does not appear that the respondent disputes the contention that the payments in question were made by the appellant pursuant to a written separation agreement, but takes the position that they do not constitute alimony or an allowance for maintenance payable on a periodic basis within the meaning of the section of the Income Tax Act above referred to. In support of this argument reliance was placed on the following decisions and dictionaries: Jones v. Ogle (1872), 42 L.J. Ch. 334, 337; McCart v. Minister of National Revenue (1950), 3 Tax A.B.C. 191, 197; Bergh v. Minister of National Revenue (1950), 1 Tax A.B.C. 333; Heal v. Minister of National Revenue (1951), 4 Tax A.B.C. 228; Covey v. Minister of National Revenue (1952), 6 Tax A.B.C. 138; the definition of the words “periodic payments” contained in the New English Dictionary on Historic Principles, edited by Sir James Murray; Bouvier’s Law Dictionary, Volume 2; the definition of the words ‘‘money payable periodically” in Stroud’s Judicial Dictionary, Second Edition, supplement.

The evidence discloses that the appellant resided in Canada at all times relevant to the present appeal and that he lived separate from his wife under the separation agreement aforesaid. The proof also reveals that a previous separation agreement between the appellant and his wife was executed on March 27, 1928. I do not believe that this document (exhibit 2) has any materiality herein. The main, nay the sole object of the present instance, is to determine if the sums of $552.56 and $11,045.63 were legally deductible from appellant’s income for the year 1949.

In respect to the year 1949 the appellant filed an income tax return showing a gross income of $13,270.02 and claimed by way of deduction $11,598.19 as alimony or separation allowance paid to his wife.

In 1928 appellant’s wife, Doris Pitman, took an action in the Court of King’s Bench, in the judicial district of Regina, against the appellant, claiming judicial separation and alimony, and minutes of settlement were filed showing that the action was settled by the defendant paying to plaintiff the costs and by the defendant entering into an agreement with the plaintiff on March 27, 1928.

The agreement of October 9, 1929, contains, inter alia, these stipulations :

In the second recital it is stated that the parties have agreed that the appellant will pay to his wife the sum of $21,000.00 in full settlement of all claims which the latter has or might thereafter have against appellant or his estate.

In the first executive paragraph of the agreement the appellant covenanted with his wife to pay her for the maintenance of herself and the children the sum of $21,000.00, with interest thereon at 512 as follows: the sum of $1,000.00 cash, with interest at the rate of 514% on the balance from time to time due, payable on the first days of February and August in each year until the full sum was paid, the principal payable in half yearly instalments of $250.00 and the balance on the first day of August, 1949.

It was agreed that the appellant’s wife was to have certain furniture and that she would accept the aforesaid sum in full of all claims which she then had or might thereafter have against the appellant or his estate on his decease, relinquishing thereby all her interest in his estate upon his decease except to the extent provided in the agreement.

It is provided by the said agreement that the appellant should have the privilege at any time, without notice or bonus, to pay to his wife the full balance due to her at the time of such payment.

It is also provided by the said agreement that in the event of the death of the appellant at any time prior to August 1, 1949, the agreement should nevertheless be continued and executed by his executors or other personal representatives.

It appears from the said agreement that Doris Pitman agreed not to assign any of the monies payable under the agreement unless her husband approved thereof in writing.

Doris Pitman agreed moreover to immediately discontinue the action commenced by her against the appellant and to pay all costs in connection therewith.

It further appears that the said Doris Pitman agreed that upon payment of the sum of $500.00, additional principal, she would within 30 days leave the City of Regina and continuously thereafter reside elsewhere.

It is also agreed that if Doris Pitman failed to comply with the provisions of the agreement or any of them the payments therein stipulated should be suspended until the omission was rectified and that such suspended payments should not bear interest.

Counsel for respondent submitted that in 1949 the Income Taz Act provided by Section 6, paragraph (d), that there should be included in computing the income of a taxpayer for a taxation year:

‘ ‘ Alimony—

(d) amounts received by the taxpayer in the year pursuant to a decree, order or judgment of a competent tribunal in an action or proceeding for divorce or judicial separation or pursuant to a written separation 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 is living apart from the spouse or former spouse required to make the payments. ’ 9

Counsel also observed that by paragraph (j) of subsection (1) of Section 11 provision was made whereby in computing the income of taxpayer for a taxation year he could deduct :

‘ ‘ Alimony—

(j) an amount paid by the taxpayer in the year pursuant to a decree, order or judgment of a competent tribunal in an action or proceeding for a divorce or judicial separation or pursuant to a written separation 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 is living apart from the spouse or former spouse to whom he is required to make the payment. ’ ’

He added that the question to be decided in this appeal is as to whether the amount paid in 1949 by the appellant to his wife pursuant to the agreement dated October 9, 1929, was an amount paid by him in accordance with a written separation agreement as alimony or other allowance payable on a periodic basis for the maintenance of Doris Pitman and the children of the marriage.

Counsel for the respondent pointed out that the Minister disallowed the deduction claimed by the taxpayer and assessed him accordingly, that the latter appealed from the assessment to the Income Tax Appeal Board and that the Chairman thereof dismissed the appeal on the ground that the amount in question was not one within the meaning of paragraph (j) of subsection (1) of Section 11 of the Income Tax Act.

Respondent’s submission then sets forth that it is admitted that to be liable to tax, the person sought to be taxed must come clearly within the words by which the tax is imposed, but it is submitted that, once within the scope and terms of the taxing statute, the taxpayer cannot escape liability unless clearly within the terms of an exemption and cannot succeed in claiming an exemption from income tax unless his claim to exemption comes clearly within the provisions of some exempting section of the statute.

It is then stated that the taxpayer must show that every constituent element necessary to the exemption is present in his case and that every condition required by the exemption section has been complied with, but that, in case of doubt, the doubt must be resolved in favour of the taxing authority : City of Montreal v. Collège Sainte-Marie, [1921] 1 A.C. 288, 290; Lumbers v. Minister of National Revenue, [1943] Ex. C.R. 202, 211; [1943] C.T.C. 281; Credit Protectors (Alberta) Limited v. Minister of National Revenue, [1946] C.T.C. 279.

Further on it is pointed out that the tax imposed by the Income l'ax Act is one upon the taxable income of the taxpayer for each taxation year and that under Section 6 of the Act the taxpayer must include in computing his income amounts received by him as alimony in accordance with paragraph (d) of Section 6 of the Act; conversely the taxpayer paying alimony may deduct the amount so paid in computing his taxable income as provided for by paragraph (j) of subsection (1) of Section 11 hereinabove referred to.

It was also submitted that in computing annual income a capital sum, even though paid in instalments, is not income in the hands of the recipient nor deductible by the taxpayer from his income: Konst am on Income Tax, Tenth Edition, p. 194; Secretary of State for India v. Scoble, [1903] A.C. 299.

The respondent’s submission contends that the whole scope of the Income Tax Act is to impose a tax on annual income and that in construing the provisions of the Act relative to allowable deductions from income the deductions should partake of the nature of income.

Counsel for respondent then observed that ‘‘alimony’’ is a personal allowance fixed by the Court to be paid by the husband for the maintenance of his wife and that it is neither the property of the wife nor a debt due by the husband. He concludes from this that the wife cannot assign or release her interest in the order and that recent arrears may be enforced, but as alimony is allotted for the support of the wife from month to month or from week to week it is necessary to obtain leave from the Court to enforce long standing arrears : Rayden on Divorce, Fourth Edition, p. 243.

Counsel for respondent stated that permanent alimony continues through the joint life of the husand and wife, but terminates on the death of either. I may say that this seems to me elementary.

He added that the use of the word ‘ 4 allowance ” is to cover the case of a separation agreement, as “alimony” is not apt to describe the allowance made to a wife under a separation agreement.

Counsel pointed out that the sections under consideration mentioned both ‘‘alimony’’ and ‘‘allowance,’’ but that this is owing to the fact that the word ‘‘alimony’’ must be used to cover the case of an order or judgment of a Court in an action for divorce or Judicial separation and that, as stated above, the word “allowance” is used for the purpose of covering the payment to be made to a wife under a separation agreement. He continued in saying that it is plain that the two words are intended to cover the same thing, namely : payments to a wife for her maintenance and support, whether pursuant to the judgment of the Court or pursuant to a separation agreement.

Counsel thereafter stated that in awarding alimony the Court invariably stipulates for payments on a periodic basis from month to month or from week to week and that the amount ordered to be paid is dependent upon the husband’s income: Rayden on Divorce, op. cit., p. 238.

It was further submitted that the amounts paid to or received by a taxpayer under the sections under discussion must be amounts payable from time to time for the support of a wife during the joint life of a husband and wife, the total amount of such payments being undetermined in the total, as such total amount is dependent upon an indeterminate period.

Counsel then added that in the present case the amount to be paid is specified and that it cannot be increased or decreased; it remains the same regardless of the term of life of either the husband or wife. He specified that a capital sum is fixed as the limit and that, while any portion thereof is outstanding and unpaid, interest is payable thereon.

Counsel for respondent submitted that the husband, if he so wished, could have paid the entire capital sum at any time and that he stipulated instalment payments for his own convenience.

He went on to say that, although the agreement under consideration is called an agreement for separation, it is in fact simply an agreement made by the appellant with his wife to rid himself of the obligation to maintain and support her and also to gain other advantages, namely the discontinuance of the action brought against him by his wife, payment by her of the costs of such action, a release by her of all her interest in his estate, and that this latter release was, by no means, of an academic nature because by virtue of the statutes of Saskatchewan his wife had at that time a statutory interest in her husband’s estate of which he could not deprive her except by the agreement under consideration: The Widow’s Relief Act (1929), chapter 25 of the Statutes of Saskatchewan, 1928-29.

It is further stated that this agreement is in fact simply a release by the wife to the husband whereby in consideration of the payment of a capital sum the wife released the appellant not only of his liability for her maintenance and support, but also in respect of other matters as hereinbefore set forth.

Counsel thereafter asserted that this case is really the converse of M cC'art v. Minister of National Revenue (ubi supra). He then referred to Bergh v. Minister of National Revenue; Heal v. Minister of National Revenue ; Covey v. Minister of National Revenue (ubr supra).

Counsel pointed out that in Bergh v. Minister of National Revenue the Tax Appeal Board was considering whether a lump sum payment was deductible, that the section under consideration was paragraph (t) of subsection (1) of Section 5 of the Income War Tax Act, that in that section the word ‘‘periodic’’ did not appear and he declared that the decision in the Bergh case would have been otherwise if the words “payable on a periodic basis’’ had been in the section then under consideration.

After perusing the pleadings and the exhibits consisting particularly of a memorandum of settlement dated April 4, 1928, carefully reading the exhaustive reasons for judgment of the Income Tax Appeal Board, studying the law and the authorities and deliberating, I have reached the conclusion that the judgment appealed from is well founded and must be affirmed.

There will be judgment dismissing the appeal, with costs against the appellant in favour of the Minister of National Revenue, to be taxed in the usual manner.

Judgment accordingly.