Date:19991116
Docket: A-638-94
CORAM: LINDEN J.A.
ROTHSTEIN J.A.
McDONALD J.A.
BETWEEN:
CAROL ANN WALKER
Appellant
-and-
HER MAJESTY THE QUEEN
Respondent
-and-
ROY STEPHEN SHATTOCK
Respondent
(Third Party)
Heard at Ottawa, Ontario, on Tuesday, November 16, 1999.
Judgment delivered from the Bench on Tuesday, November 16, 1999.
REASONS FOR JUDGMENT OF THE COURT BY: McDONALD J.A.
Date:19991116
Docket: A-638-94
CORAM: LINDEN J.A.
ROTHSTEIN J.A.
McDONALD J.A.
BETWEEN:
CAROL ANN WALKER
Appellant
-and-
HER MAJESTY THE QUEEN
Respondent
-and-
ROY STEPHEN SHATTOCK
Respondent
(Third Party)
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench on Tuesday, November 16, 1999)
McDONALD J.A.
[1] In spite of the able argument of counsel for the appellant we have not been convinced that the learned Tax Court Judge made any error which would warrant our interference.
[2] The simple issue before us is whether the portion of a pension paid to the wife pursuant to the equalization of property required by the Family Law Act ("FLA") is taxable as income to the recipient.
[3] The separation agreement here clearly calls for the husband to assign one half of the gross proceeds of his pension income from his military service. The Tax Court Judge characterizes this as the last act by the parties in "equalizing the net family properties" under the FLA. If the assignment had been processed at source by the military authorities, as contemplated in the separation agreement, two separate cheques would have been issued. Each party would then have reported annual income from this source in the amount of $5,021.00.
[4] It was the inability to proceed in this manner which resulted in the situation where the husband made payment of half the gross pension income directly to the wife.
[5] We believe it was the intention of the parties at the time the separation agreement was executed that each would pay income tax on the gross amount received with the result that each would be left with their share of the pension (the property in this case) after taxes.
[6] The appellant argued that she is in a worse position having to pay tax on her share of the pension when it was paid out, than she would have been if the pension had been valued and divided at the time of separation. However, such a valuation would have taken into account the cost of future taxes in calculating the value of the pension. The appellant then would have received half of the pension"s value after taxes. The appellant is in no worse a position now. She will receive half the value of the pension after tax.
[7] The appeal is dismissed without costs.
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