Choquette v. The Queen, 2004 TCC 339 (Informal Procedure)

Citation: 2004TCC339 Date: 20040517 Docket: 2003-2742(IT)I

BETWEEN:

GÉRARD CHOQUETTE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

(delivered orally from the Bench at

Nanaimo, British Columbia, on March 23, 2004)

[1]      This appeal pursuant to the informal procedure was heard at Nanaimo, British Columbia on March 23, 2004. The Appellant testified and the Respondent called his former wife, Melody Whittaker.

[2]      Paragraphs 3 to 9 inclusive of the Reply to the Notice of Appeal set out the matters in dispute. They read:

3.          In computing income for the 2001 taxation year, the Appellant deducted support payments in the amount of $13,626.00 (the "Amount").

4.          The Minister of National Revenue (the "Minister") initially assessed the Appellant's 2001 taxation year to disallow the Amount. Accordingly, a Notice of Assessment dated August 16, 2002 was sent to the Appellant.

    

5.          The Appellant objected to the assessment of his 2001 taxation year by serving on the Minister a Notice of Objection dated December 14, 2002.

6.          On April 10, 2003, the Minister varied the assessment for the 2001 taxation year with respect to an issue which is not under appeal. The Minister otherwise confirmed the assessment for that year.

7.          In so confirming the issue under appeal, the Minister relied on the following assumptions of fact:

a)          the Appellant and Melody L. Whittaker ("Ms. Whittaker") were married at Sidney, B.C. on April 28th, 1979;

b)          on or about June 15th, 2000, the Appellant and Ms. Whittaker separated;

c)          the Appellant and Ms. Whittaker lived separate and apart since they separated and they continue to do so;

d)          on June 21st, 2001, the Appellant and Ms. Whittaker entered into the Separation Agreement;

e)          the provisions of the Separation Agreement provided, among other things, that "[i]n lieu of spousal support the [Appellant] shall pay to mutual debtors of the couple the sum equivalent to, $1,000.00 per month, commencing on the 15th day of July, 2000, until and including the 15th day of July, 2002;

f)           Ms. Whittaker did not have discretion as to the use of the payments that were to be made by the Appellant under the Separation Agreement;

g)          the Appellant has not provided documentation to support the Amount; and

h)          the Appellant is not entitled to deduct any amount in spousal support payments with respect to Ms. Whittaker in the 2001 taxation year.

B.         ISSUE TO BE DECIDED

8.          The issue is whether the Minister properly disallowed the Amount for the 2001 taxation year.

C.         STATUTORY PROVISIONS RELIED ON

9.          He relies on subsections 56.1(4), 60.1(2) and 60.1(4) and paragraph 60(b) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended for the 2001 taxation year (the "Act").

[3]      All of the assumptions except 7 g) were confirmed by the evidence. The Court accepts the Appellant's documents and testimony that refute assumption 7 g).

[4]      The Appellant testified that he did not understand the meaning of "in lieu of spousal support" described in assumption 7 e) to be that claimed by the Respondent. Melody Whittaker drafted the Separation Agreement (Exhibit A-2) and understood these words to have the meaning claimed by the Respondent.

[5]      In the Court's view, these words are clear and unequivocal. They mean that "instead of " spousal support, the Appellant shall pay the couples' creditors as stated. He did this. However these payments do not constitute spousal support within the meaning of the Income Tax Act.

[6]      For this reason, the appeal is dismissed.

Signed at Edmonton, Alberta, this 17th day of May 2004.

"D.W. Beaubier"

Beaubier, J.