Beaubier,
J.T.C.C.
(orally):—This
matter
was
heard
in
Vancouver,
British
Columbia
on
the
February
4,
1994
pursuant
to
the
informal
procedure
of
this
Court.
The
appellant
was
the
only
witness.
For
her
1990
taxation
year
the
appellant
was
assessed
on
the
basis
that
she
failed
to
include
in
her
reported
income
the
sum
of
$3,000
allegedly
received
in
the
year
as
alimony
or
maintenance
payments
pursuant
to
paragraphs
56(1
)(b)
and
(c)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
At
issue
is
the
sum
of
$3,000
which
is
described
in
paragraph
6
of
an
agreement
dated
November
30,
1990,
which
was
signed
by
Mr.
and
Mrs.
Humphrey
as
husband
and
wife
on
the
legal
advice
of
their
respective
lawyers.
Paragraph
6
reads:
MAINTENANCE
FOR
THE
CHILDREN
BY
Husband
6.
So
long
as
the
children
are:
(a)
In
the
custody
of
the
wife;
AND
(b)
Either:
(i)
Under
the
age
of
19
years;
OR,
(ii)
Over
the
age
of
19
years,
but
under
the
age
of
23
years,
and
engaged
in
and
maintaining
passing
grades
in
a
full-time
academic
or
vocational
education
or
training
in
respect
to
which
there
is
no
remuneration,
or
prevented
by
age,
infirmity
or
illness
from
being
so
engaged;
and
(c)
Unmarried;
(d)
Dependent
in
whole
or
in
part
upon
the
parties
hereto
for
financial
support
and
maintenance,
THEN
the
husband
shall
pay
to
the
wife
in
contribution
to
the
maintenance
and
education
of
the
children
the
sums
as
set
forth
in
the
Provincial
Court
of
British
Columbia
Order,
Richmond
Registry
No.
00270
made
by
His
Honour
Judge
Poole
Thursday
January
7,
1988,
and
subsequently
varied
by
Order
dated
August
10,
1988,
and
any
subsequent
variations
of
the
same
as
may
be
determined
by
a
Court
of
competent
jurisdiction;
(e)
The
parties
agree
that
in
respect
to
the
present
arrears
in
the
amount
of
$3,000
shall
be
considered
paid
by
the
husband
and
received
by
the
wife
for
tax
purposes
as
a
set-off
in
respect
to
the
purchase
by
the
wife
of
the
husband's
interest
in
the
matrimonial
home.
(f)
The
parties
agree
that
the
husband
is
presently
unemployed
but
has
the
prospect
of
becoming
employed
in
the
near
future.
The
parties
therefore
agree
that
from
September
1,
1990
to
October
30,
1990
the
husband
will
be
required
to
pay
the
sum
of
$400
per
month
being
two
payments
of
$200
on
the
15th
of
30th
of
each
and
every
month
unless
the
husband
becomes
employed.
When
the
husband
becomes
employed,
within
two
weeks,
the
maintenance
payments
will
revert
to
the
Court
ordered
amount
of
$750
per
month
payable
in
two
monthly
installments.
In
any
event,
from
November
15,
1990,
the
maintenance
payments
shall
be
pursuant
to
the
provincial
court
order
made
August
10,
1988.
(g)
The
parties
acknowledge
that
there
are
no
arrears
of
maintenance
owing
to
the
wife
by
the
husband.
The
appellant
states
that
she
did
not
receive
the
$3,000,
although
it
was
credited
on
the
purchase
of
her
husband's
equity
in
the
matrimonial
home,
and
that
it
did
not
relate
to
the
maintenance
payments
for
the
children.
Similar
situations
were
reviewed
by
this
Court
in
Armstrong
v.
M.N.R.,
[1988]
1
C.T.C.
2019,
88
D.T.C.
1015,
and
Blais
v.
M.N.R.,
[1990]
2
C.T.C.
2005,
90
D.T.C.
1499.
In
the
instant
case
an
examination
of
paragraph
6
is
enlightening.
The
heading
is
"MAINTENANCE
FOR
THE
CHILDREN
BY
Husband”.
Subparagraph
(e)
refers
to
"arrears"
which
in
context
can
only
be
arrears
of
maintenance
and
which
are
"set-off"
as
“paid”
and
“received”,
and
are
further
described
as
"for
tax
purposes".
Finally
subparagraph
(g)
then
acknowledges
"that
there
are
no
arrears
of
maintenance
owing
to
the
wife
by
the
husband”;
this
emphasizes
the
present
tense
concept
of
the
“set-off”
described
in
subparagraph
(e).
In
these
circumstances
there
was
an
"amount
received"
by
the
appellant
as
maintenance
within
the
meaning
of
the
Income
Tax
Act
as
set
forth
in
the
Income
Tax
Act
and
particularly
as
described
by
Judge
Bonner
in
Armstrong,
supra.
The
appellant
is
a
registered
nurse
supporting
four
children.
The
agreement
ranted
her
former
husband
a
set-off
of
$3,000.
In
fact
the
tax
advantage
of
the
$3,000
to
the
husband
was
greater
than
$3,000,
given
the
nature
of
the
agreement.
This
disadvantage
to
the
appellant
has
only
occurred
to
the
detriment
of
the
couples'
children
whose
welfare
both
agreed
in
paragraph
5
of
the
agreement
was
of
their
paramount
interest.
It
is
to
be
hoped
that
Mr.
Humphrey
will
realize
this
and
make
an
appropriate
gift
to
the
appellant
to
compensate
her
for
the
tax
and
interest
involved.
The
appeal
is
dismissed.
Appeal
dismissed.
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