[OFFICIAL ENGLISH TRANSLATION]
Date: 20000927
Docket: 1999-4357(IT)I
BETWEEN:
MARCEL DESROSIERS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This appeal was heard under the
informal procedure, in Sept-Îles, Quebec, on September 11,
2000.
[2] In a July 2, 1999, notice of
reassessment for the 1997 taxation year, the Minister of National
Revenue ("the Minister") increased the appellant's
net income by $9,600 and disallowed the deduction requested by
the appellant for support or other periodic payment.
[3] In making and defending the
reassessment at issue, the Minister made the following
assumptions in particular, which were admitted by counsel for the
appellant:
(a) on his initial
income tax return for the 1997 taxation year, the appellant had
deducted $9,600 from his income as support or other periodic
payment;
(b) concerning the
deduction for support or other periodic payment, the Minister had
assessed the appellant's initial return as filed;
(c) under an August
10, 1990, Consent to Judgment by the Superior Court, the
appellant agreed to pay Colette Mansour, his former spouse,
$200 per week when the two children would return to live
with her;
(d) the
appellant's children are Isabelle Desrosiers, born March 23,
1973, and Valérie Desrosiers, born December 20, 1974;
(e) during the
taxation year at issue, Valérie and Isabelle were of legal
age and no longer lived with their mother;
(f) during the
taxation year at issue, the appellant issued 12 cheques for
$400 to Isabelle and 12 cheques for $400 to
Valérie;
(g) the cheques made
out to Isabelle and Valérie were cashed by them;
(h) the Minister
therefore refused to allow the $9,600 deduction requested by the
appellant for support or other periodic payment for the taxation
year at issue.
[5] The issue is whether, for the
appellant, the amount of $9,600 at issue for the 1997 taxation
year was an allowable deduction for support or other periodic
payment.
[6] Following an agreement signed
between the appellant and his former spouse, the appellant agreed
to pay his former spouse $200 per week, indexed starting on May
2, 1988, when the two children would return to live with her.
[7] Two conditions of that agreement
between the parties no longer exist. Firstly, the children are of
legal age and, secondly, the children no longer live with the
appellant's former spouse.
[8] Section 60 of the Income Tax
Act reads in part as follows:
SECTION 60: Other deductions.
There may be deducted in computing a taxpayer's income for
a taxation year such of the following amounts as are
applicable:
...
(b) Support - the
total of all amounts each of which is an amount determined by the
formula
A - (B+C)
where
A ...
B is the
total of all amounts each of which is a child support amount that
became payable by the taxpayer to the particular person under an
agreement or order on or after its commencement day and before
the end of the year in respect of a period that began on or after
its commencement day, and
C ...
[9] In Curzi v. Canada (Minister of
National Revenue - M.N.R.) (F.C.T.D.), [1994] F.C.J. No. 154,
February 8, 1994, Noël J.A. of the Federal Court of Appeal
wrote as follows at paragraph 19:
However, the right of custody is not perpetual and a custody
order could not be set up against an emancipated adult child who
voluntarily chooses to withdraw from parental authority. The fact
that a child may, in such circumstances, still be a child of the
marriage because, having left the parental home, he or she cannot
provide for his or her own needs does not mean that the child
remains in the custody of the parent whom he or she has chosen to
leave. It is a prerequisite to the concept of custody that there
be parental authority, which cannot be exercised over an
emancipated adult child who chooses to withdraw from that
authority. The trial judge could therefore not conclude that
Stéphane was still in the custody of his mother solely on
the ground that he was in need after leaving his mother's
home or that the custody order made in 1977 had not, at the time
in question, formally been revoked.
[10] In Wade v. Canada, [1995] T.C.J.
No. 1334, October 16, 1995, Taylor J of our Court wrote as
follows at paragraph 5:
... The main position of the Respondent was that since
the amounts (whatever they represent) were paid directly to the
three children, they do not come under the provisions for
deductibility - paragraph 60(b) and subsection 60.1 of the Act. I
am not aware that there is any jurisprudence which would overcome
that fact, and provide for the deduction, since such direct
payment were not provided for in the original agreement for
alimony, as opposed to all payments thereunder being paid to the
ex-spouse. That aspect of it appears to be another classic case
of a Father attempting to provide a benefit directly to his
children, outside the terms of an agreement with the ex-spouse,
which, while undoubtedly noble and perhaps more satisfying to the
Father, nevertheless negates a claim for deduction. This is aside
from the fact that the children are no longer minors nor do they
even reside with his ex-spouse. I am unable to find any basis
upon which the claim may be favourably received.
[11] The facts in the case at bar are
similar to the facts in the two cases mentioned above. The facts
in this case do not meet the requirements of
sections 60(b) and 60.1 of the Income Tax Act.
The conditions of the agreement between the parties no longer
exist. The children are of legal age and no longer live with the
appellant's former spouse. If the appellant wanted to make
payments directly to the children, he was free to do so.
[12] The two above-mentioned decisions run
counter to an interpretation of similar legislation provided in
an interpretation bulletin of Quebec's Ministère du
revenu. According to that interpretation, deductibility is
allowed if payments are made to the beneficiary and if the person
pays an amount under an agreement to a child, whether or not of
legal age.
[13] The Court prefers to rely on the
above-mentioned decisions rather than on that interpretation of
Quebec's Taxation Act.
[14] For the appellant, the amount of $9,600
at issue for the 1997 taxation year was not an allowable
deduction for support or other periodic payment.
[14] The appeal is therefore dismissed.
Signed at Ottawa, Canada, this 27th day of September 2000.
D.J.T.C.C.
Translation certified true
on this 17th day of September 2003.
Sophie Debbané, Revisor
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