Date: 20010628
Docket: 2000-2265-IT-I
BETWEEN:
JAMES K. SCOTT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hershfield, J.T.C.C.
Facts
[1]
This is an appeal under the Informal Procedure of a reassessment
disallowing the deduction in 1997 of support payments made in
that year by the Appellant to Catherine Anne Stenger Mass.
[2]
The facts of this case are not in dispute. Counsel for the
Respondent agreed to the following facts attested to by the
Appellant:
(a)
the Appellant is the natural father of Jesse Angus Scott Mass.
Ms. Mass is the mother;
(b)
the Appellant was, in 1990, when Jesse was born, cohabiting with
Ms. Mass in a conjugal relationship. Such cohabitation was
of a nature and for a period that would, if the extended meaning
of "spouse" set out in subsection 252(4) of the
Income Tax Act (the "Act") applied, deem
Ms. Mass to be the Appellant's spouse at that time and for a
further period ending in 1992 when the cohabitation ceased;
(c)
pursuant to a written custody agreement entered into between Ms.
Mass and the Appellant, the Appellant agreed to pay, commencing
May 1992, maintenance and support to Ms. Mass for the maintenance
and support of herself and Jesse;
(d)
the support payments have been made since May 1992 and continued
with the Appellant's willing acceptance of his moral and
legal obligations to provide support. Although hearsay, evidence
was adduced without objection (except as to relevance) that Ms.
Mass had reported support payments in her income tax return in
each year she received such payments including 1997;
(e)
the 1997 support payments, in the amount of $7,900.00, were paid
to Ms. Mass pursuant to the written custody agreement;
(f)
all the requirements of the Act for the deduction of the
said $7,900.00 payment were met except the requirement in issue;
namely, whether in 1997, Ms. Mass was the former spouse of the
Appellant for the purposes of paragraph 60(b) of the
Act. If she was, the Respondent agrees that the deduction
is permitted and the appeal should be allowed.
[3]
The requirement that Ms. Mass be the former spouse of the
Appellant is set out in paragraph 60(b) of the Act
and in the definition of "support amount" in
subsection 56.1(4). Paragraph 60(b) prescribes a formula
setting out the amount deductible. It includes a "support
amount" and reduces the inclusion in circumstances not
applicable here. Accordingly, the payment would be deductible
under paragraph 60(b) if it is a "support
amount" as defined in subsection 56.1(4).
[4]
The definition of "support amount" in subsection
56.1(4) is as follows:
"support amount" means an amount payable or
receivable as an allowance on a periodic basis for the
maintenance of the recipient, children of the recipient or both
the recipient and children of the recipient, if the recipient has
discretion as to the use of the amount, and
(a) the recipient is the spouse of former spouse of the
payer, the recipient and payer are living separate and apart
because of the breakdown of their marriage and the amount is
receivable under an order of a competent tribunal or under a
written agreement; or
(b) the payer is a natural parent of a child of the
recipient and the amount is receivable under an order made by a
competent tribunal in accordance with the laws of a province.
[5]
Paragraph (b) of the definition of "support
amount" would permit the deduction claimed if the Appellant
had an order. Since the Appellant does not have an order, the
payment must fall within paragraph (a) of the definition
of "support amount" to be deductible. As stated, the
requirement of paragraph (a) in issue is whether the
recipient Ms. Mass is the former spouse of the payor, the
Appellant. That the Appellant was not legally married to Ms. Mass
takes me to examine the extended definition of spouse found in
the Act.
[6]
The extended definition of "spouse" is found in
subsection 252(4) of the Act as it read in 1997. That
subsection reads as follows:
(a) words referring to a spouse at any time
(emphasis added) of a taxpayer include the person of the opposite
sex who cohabits at that time with the taxpayer in a conjugal
relationship and
(i) has so cohabited with the taxpayer throughout a 12-month
period ending before that time, or
(ii) is a parent of a child of whom the taxpayer is a parent
(otherwise than because of the application of
subparagraph (2)(a)(iii))
[7]
This subsection was added in 1994 applicable after 1992. That is,
under the transitional rule, this expanded meaning of
"spouse" is to be read as being part of the Act
effective January 1, 1993. Since the Act is being read in
this case in respect to the 1997 year (the payment year), the
expanded definition of "spouse" unquestionably applies.
Since the expanded definition of "spouse" has
application, it must be applied in accordance with its terms,
which terms require the examination of the subject relationship
(to determine if it is a conjugal relationship) at a time (that
is "any time" which includes a time before
January 1) that the relationship needs to be determined,
i.e. the time when the reference to spouse is being examined
under the Act. Since the context here is determining a
"former" relationship (a former spouse), the time for
determining the relationship will almost invariably be before the
year in question. For example, a conjugal cohabitation commencing
in 1995 ending in 1996 will be recognized in 1997 as giving rise
to former spouses.[1] That is, in the context of determining whether a
person is a former spouse, the expanded definition has to look
back. The expanded definition does not put a limit on how far to
look back. To the contrary, it stipulates, in effect, "any
time" as the available look back time. The expanded
definition applies at "any time" the relationship needs
to be examined including relationships that started, or started
and ended, prior to 1993. If the expanded definition were to
apply otherwise the express language of the definition would have
provided dates before and after which the relationship can be
examined or not. If one wants a legislative model exemplifying
such temporal applications one only has to look at another
definition in subsection 56.1(4), namely, the definition of
"commencement day". The introduction of that definition
is effective after 1996 but the Act does not then read as
if the definition does not depend on other relevant times. One
must determine at any time after 1996 whether there is a
commencement date but whether or not a commencement date in fact
exists depends on events happening before April 1997 or after May
1997 as expressly set out in the definition of "commencement
day". If Parliament had intended that common law
relationships before 1993 could not be recognized, the
cohabitation period referred to in subsection 252(4) could
similarly have referenced relevant dates as to when cohabitation
had to commence or end. The effective date alone being 1993, does
not do that in my view, at least in this case where the express
language of the amended provision invites a construction that
permits (dictates) examining a relationship "at any
time" which, as stated, clearly includes a time before the
effective date of the amendment. I see no other interpretative
approach in this case.[2]
[8]
It is noteworthy that unlike subsection 252(3), subsection 252(4)
makes no reference to the phrase "former spouse".
Arguably, this omission in subsection 252(4), supports the
view that one could have a common law spouse recognized without
recognition of there being a former spouse after the common law
relationship has ended. In a literal sense subsection 252(4) only
defines "spouse". It says when a party shall for the
purposes of the Act be treated as a spouse. It does not go
on to say that a person regarded as a spouse for the purposes of
the Act should be regarded as a former spouse for the
purposes of the Act when the extended definition of spouse
no longer applies to the particular relationship. On the other
hand, "former spouse" is not defined in the Act
except in subsection 252(3) in the context of void or
voidable marriages. As such, the phrase "former spouse"
should have its normal meaning where it is used in other contexts
and that normal meaning would include a person who had once been
a spouse, actual or by the extended definition, but who is no
longer a spouse. In my view, the inference of subsection 252(3)
is not sufficient to detract from such a construction of the term
"former spouse".
[9]
Accordingly, I find the subject payments were paid to a former
spouse as required by paragraph 60(b) and the appeal is
thereby allowed.
Signed at Ottawa, Canada, this 28th day of June 2001.
"J.E. Hershfield"
J.T.C.C.
COURT FILE
NO.:
2000-2265(IT)I
STYLE OF
CAUSE:
James K. Scott and
Her Majesty the Queen
PLACE OF
HEARING:
Winnipeg, Manitoba
DATE OF
HEARING:
April 3, 2001
REASONS FOR JUDGMENT BY: The
Honourable Judge J.E. Hershfield
DATE OF
JUDGMENT:
June 28, 2001
APPEARANCES:
For the
Appellant:
The Appellant himself
For the
Respondent:
Cary Clark (student at law)
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-2265(IT)I
BETWEEN:
JAMES K. SCOTT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on April 3, 2001 at Winnipeg,
Manitoba, by
the Honourable Judge J.E. Hershfield
Appearances
For the
Appellant:
The Appellant himself
For the
Respondent:
Cary Clark (student at law)
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 1997 taxation year is allowed, without costs, and
the assessments are referred back to the Minister of National
Revenue for reconsideration and reassessment for the reasons set
out in the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 28th day of June 2001.
J.T.C.C.
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