Docket: 2011-1256(IT)I
BETWEEN:
WALTER YOURKIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard on November 29, 2011, at Toronto, Ontario
Before: The Honourable
Justice G. A. Sheridan
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Rita Araujo
|
____________________________________________________________________
JUDGMENT
In accordance with the attached Reasons for
Judgment, the appeal from the assessment under the Income Tax Act of the
Appellant’s 2009 taxation year is dismissed.
Signed at Ottawa, Canada, this 6th day of December 2011.
“G. A. Sheridan”
Citation: 2011TCC557
Date: 20111206
Docket: 2011-1256(IT)I
BETWEEN:
WALTER YOURKIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Sheridan J.
[1]
The Appellant Walter
Yourkin, is an 80-year-old former factory worker who retired from Lever
Brothers Limited (“Unilever”) in 1997. Around that time, his marriage of nearly
40 years was ending. Litigation resulted in, among other things, his having to
pay spousal support and the division of his Unilever pension benefits between
Mr. Yourkin and his ex-wife. The issue is whether amounts paid from the
Unilever pension plan directly to his ex-wife are a “support amount” within the
meaning of subsection 56.1(4) so as to be deductible under the Income Tax
Act.
[2]
As far as Mr. Yourkin
is concerned, no distinction can be drawn between the support payments he made out of his employment income while
employed by Uniliver and his ex-wife’s share of the Uniliver pension benefits paid
upon his retirement. Mr. Yourkin has made this argument, without success,
before the Tax Court of Canada in respect of other taxation years [Yourkin
v. R., 2003 TCC 958 (McArthur, J.); 2006 TCC 178 (Paris, J.); 2008 TCC
686 (Margeson, J.)] each appeal involved the same facts as the present matter. These
were succinctly set out by McArthur, J. in the appeal of the assessment from the
2001 taxation year:
2 … The Appellant and his former spouse Phyllis
Yourkin, were separated in August 1994. From May 1995, the Appellant's
employer, Lever Brothers Limited, deducted $1,500 per month from the
Appellant's pay checks for spousal support. An equalization of net family
property was implemented by Judgment of the Ontario Court (General Division) on
January 13, 1997. In the Judgment, the family property included the Appellant’s
entitlement to a Unilever Canada Pension. Phyllis Yourkin was awarded 42.5% of
the Appellant’s pension. The Judgment relieved the Appellant from payment of
spousal support after his retirement in January 1997. His former spouse
received $13,191 annually directly from the Unilever Canada Pension, which was
part of her division of the family property. The Appellant and Phyllis Yourkin
were taxable on their respective amount. The Appellant did not pay tax on the
$13,587 he was attempting to deduct.
3 Justice Walsh in his Judgment relied on Minutes of
Settlement and ordered:
3. THIS COURT ORDERS pursuant to the Family Law Act
that spousal support shall be paid or payable on the following terms:
a. Subject to what is set out below, the obligation of the
defendant to pay to the plaintiff spousal support shall terminate as of January
1, 1997.
b. The defendant is to provide forthwith to the plaintiff
reasonable particulars of any further employment income to be received by him
thereafter, and immediately on such notification, the plaintiff is to advise
the defendant of all income being then received by her.
...
4. THIS COURT ORDERS pursuant to the Family Law Act that the
directions set out below are to be followed with respect to defendant's pension
with Unilever Canada Pension Plan:
a. The plaintiff shall be entitled to receive a share of all
retirement benefits payable to the defendant under the Unilever Canada Pension
Plan ("the pension plan") which is registered under the Ontario
Pension Benefits Act registration No. C000322. Her share of the benefits,
calculated as set out below, amounts to 42.5% of $29,362.58 per annum, or
$1,039.92 per month.
...
h. The plaintiff shall indemnify the defendant and save him
harmless from the tax liability attributable to her share of the pension and
the benefits thereunder (or for the payment of the compensation equivalent to
her share of the pension) and there shall at the request of either party be an
accounting annually to determine the amount of tax paid by the defendant with
respect to the plaintiff's share of the pension (or compensation payments)
which amount shall be payable by the plaintiff to the defendant forthwith upon
determination and notice to the plaintiff.
[3]
Mr. Yourkin’s argument is
that he never signed the Minutes of Settlement upon which Justice Walsh based his Judgment (“Walsh Judgment”) and it is, therefore, not binding
on him. In essence, he seeks to refute the Minutes of Settlement upon which the
Walsh Judgment was based in the hope of rendering deductible the Unilever
pension benefits paid directly to his ex-wife. Mr. Yourkin directed the Court
to the signature which appears on page 5 of the Minutes of Settlement, insisting
that it was neither his nor made on his behalf. However, Mr. Yourkin
admitted on cross-examination that he was represented by counsel during the time
leading up to the Walsh Judgment. He provided no evidence to substantiate his
bare claim that he had not authorized his lawyer to execute the Minutes of
Settlement.
[4]
Even if I could accept that Mr.
Yourkin had not agreed to the Minutes of Settlement, this Court has no
jurisdiction to overturn the judgment of another court.
[5]
The Walsh Judgment treats the
payment of spousal support and the division pension benefits separately in
paragraphs 3 and 4, respectively (as quoted by McArthur, J., above).Turning
first to the pension benefits, it is clear from the terms of the Minutes of
Settlement and the Walsh Judgment that they formed part of the property
eligible for division following the breakdown of the Yourkins’ marriage. The
effect of the Walsh Judgment was to sever the pension so that when payable, the
proportionate share of each spouse would be paid directly to Mr. Yourkin
and his ex-wife, respectively. Each received it as income in his or her own
hands. In 2009, Mr. Yourkin duly reported the approximately $19,000 he had
received during that taxation year; it can be inferred from his testimony,
Exhibit A‑7 and his claim of $13,587 in spousal support deductions that,
in all probability, his ex-wife received that amount in 2009 in respect of her share
of the pension benefits. Each was responsible for the payment of tax on the
income received.
[6]
As for spousal support, the Walsh
Judgment provided for the termination of Mr. Yourkin’s obligation to pay such
amounts as of January 1, 1997. He admitted there were no further court orders
or written agreements requiring him to pay spousal support. Thus, even leaving
aside the pension benefits analysis the $13,587 claimed in 2009 does not fall
within the definition of “support amount” under subsection 56.1(4) of the Act
because it was not paid “under an order of a competent tribunal or under a
written agreement”.
[7]
In all the circumstances, the
$13,587 amount is not deductible as spousal support under subsection 60(b) of
the Act. The appeal is dismissed.
Signed at Ottawa, Canada, this 6th day of December 2011.
“G. A. Sheridan”
CITATION: 2011TCC557
COURT FILE NO.: 2011-1256(IT)I
STYLE OF CAUSE: WALTER YOURKIN AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Toronto,
Ontario
DATE OF HEARING: November 29, 2011
REASONS FOR JUDGMENT BY: The
Honourable Justice G. A. Sheridan
DATE OF JUDGMENT: December 6, 2011
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
Counsel for the
Respondent:
|
Rita Araujo
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa,
Canada
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