Rowe,
D
.T.C.C.).:—The
appellant
appeals
from
a
reassessment
of
income
tax
for
her
1990
taxation
year.
In
filing
her
income
tax
return
for
the
1990
taxation
year
the
appellant
did
not
report
any
child
maintenance
payments
received
by
her
in
the
year
in
respect
of
her
three
minor
children.
On
December
20,
1991
the
Minister
of
National
Revenue
reassessed
the
appellant
in
respect
of
her
1990
taxation
year
by
adding
into
income
the
sum
of
$4,275
received
by
her
as
child
maintenance
payments
from
the
natural
father
of
the
children.
The
appellant
filed
a
notice
of
objection
and
the
Minister
issued
a
reassessment
dated
September
4,1992
in
which
he
revised
the
amount
of
child
maintenance
payments
included
in
the
appellant's
income
by
reducing
the
amount
from
$4,275
to
$2,250.
The
appellant
now
appeals
from
that
reassessment.
The
Minister,
in
so
reassessing,
made
an
error
in
computation
as,
in
accordance
with
the
reasons
underlying
the
reassessment,
the
amount
of
income
from
child
maintenance
should
only
have
been
reduced
to
the
sum
of
$2,700.
However,
that
is
significant
only
for
the
purpose
of
explaining
what
would
otherwise
appear
to
be
an
anomaly
between
the
positions
taken
during
the
appeal
by
the
parties.
In
further
reassessing
the
appellant
for
the
1990
taxation
year
the
Minister
took
the
position
that
the
appellant
was
required
to
include
into
income
the
maintenance
payments
made
by
the
children’s
natural
father
pursuant
to
the
provisions
of
paragraphs
3(a)
and
56(1)(c.1)
and
subsection
56.1(1)
for
the
reasons
that:
—
the
payor
was
the
natural
father
of
the
children;
—
the
payments
were
received
by
the
appellant
in
the
year,
pursuant
to
an
order
made
after
February
10,
1988
by
a
competent
tribunal
in
accordance
with
the
laws
of
a
province,
as
an
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
children;
—
at
the
time
the
payments
were
received
and
throughout
the
remainder
of
the
year,
the
appellant
was
living
apart
from
the
payor.
The
appellant
testified
that
she
lives
in
Williams
Lake,
British
Columbia,
is
employed
there
with
the
Ministry
of
Forests
and
is
the
mother
of
three
children
aged
18,
16
and
13.
David
Cox
is
the
natural
father
of
all
three
children
and
she
has
always
had
custody.
The
superintendent
of
Child
Welfare
for
the
Province
of
British
Columbia
obtained
an
order
from
His
Honour
C.C.
Barnett,
a
judge
of
the
Provincial
Court
of
British
Columbia,
sitting
as
a
judge
of
the
Family
Division,
dated
November
3,
1975
(Exhibit
A-1)
whereby
David
Cox
was
declared
to
be
the
father
of
the
named
child
and
further
ordering
the
father
to
pay
the
sum
of
$75
per
month
for
the
support
of
the
child.
Another
child
was
born,
the
father
again
being
David
Cox,
and
on
September
28,
1978,
a
consent
order
(Exhibit
A-2)
was
approved
and
issued
by
His
Honour
Judge
Barnett
setting
out
the
acknowledgement
of
paternity
by
David
Cox
and
ordered
him
to
pay
to
the
appellant
the
sum
of
$75
per
month
on
the
30th
day
of
each
and
every
month
commencing
October
30,
1978.
Then,
on
June
29,1979
another
child
was
born
to
the
appellant,
David
Cox
again
being
the
natural
father,
and
on
February
8,
1988
the
appellant
and
Cox
entered
into
a
written
agreement
pursuant
to
section
74
of
the
Family
Relations
Act
of
British
Columbia
in
which
paternity
was
acknowledged
by
Cox,
and
an
agreement
that
she
would
have
custody
of
the
youngest
child
as
well
as
the
two
previous
children
and
that
Cox
would
pay
to
the
appellant
the
sum
of
$75
per
month
for
the
support
of
the
youngest
child
named
in
the
agreement.
The
agreement
was
filed
with
the
Williams
Lake
Provincial
Court
Registry
on
March
1,
1988.
The
appellant
stated
that
she
found
it
necessary
to
apply
to
the
Court
for
additional
moneys
for
the
support
of
the
three
children.
On
September
28,
1989
she
filed
an
application
to
vary
an
order
(Exhibit
A-4)
and
the
payor,
David
Cox,
countered
with
an
application
to
rescind
the
existing
maintenance
orders
or
in
the
alternative
to
vary
them
to
one
dollar
per
month.
The
matter
was
heard
by
His
Honour
Judge
Barnett
who
issued
reasons
for
judgment
(Exhibit
A-6)
and
in
accordance
therewith
a
new
order
dated
June
27,
1990
(Exhibit
A-5)
was
filed.
Subsequent
to
this
date,
the
appellant
now
received
from
David
Cox
the
sum
of
$150
per
month
for
each
of
three
children
for
a
total
of
$450
per
month,
the
first
payment
having
been
received
on
June
30,
1990.
In
filing
her
income
tax
return
for
the
1990
taxation
year
she
did
not
include
any
of
the
maintenance
payments
in
her
income
as
the
maintenance
received
by
her
since
1975
and
the
further
maintenance
in
1978
and
1988
for
additional
children
had
never
been
taxable.
The
appellant
received
a
notice
of
reassessment
for
the
1990
taxation
year
by
which
the
Minister
added
into
income
the
sum
of
$4,275,
apparently
on
the
basis
that
the
appellant
had
been
receiving
total
maintenance
of
$450
per
month
for
the
entire
calendar
year
of
1990.
The
appellant
filed
a
notice
of
objection,
(Exhibit
A-8)
pointing
out
the
order
providing
for
increased
maintenance
did
not
come
into
effect
until
June
27,
1990
and
further
advised
the
Minister
that
the
said
order
was
merely
a
variation
order
and
not
a
new
one
establishing
an
entitlement
to
maintenance.
The
Minister
issued
a
reassessment
dated
September
4,
1992
in
which
the
revised
taxable
maintenance
payments
were
in
the
sum
of
$2,250.
The
appellant,
however,
received
payments
of
$450
per
month
for
six
months,
commencing
June
30,
1990,
but
excluding
the
December
30
payment
which
was
not
received
until
the
next
year.
The
appellant
indicated
she
is
at
a
loss
to
understand
how
the
entire
amount
of
$450
per
month
for
maintenance
is
now
suddenly
all
taxable
income
in
her
hands
when
the
only
effect
of
the
order
dated
June
27,
1990
was
to
increase
the
amount
of
maintenance
from
the
sum
of
$225
per
month
for
her
three
children
to
$450
per
month.
The
net
effect
of
making
all
of
the
maintenance
taxable,
when
none
of
it
was
taxable
prior
to
obtaining
the
increase
amount
as
ordered
by
the
Court,
is
to
eliminate
the
gain
she
made.
The
reason
behind
the
application
for
additional
maintenance
was
that
the
proper
care
of
the
children
required
more
funds.
Counsel
for
the
appellant
submitted
that
none
of
the
maintenance
ordered
by
the
Court
on
June
27,
1990
should
be
taxable
in
that
it
did
nothing
more
than
increase
the
amount
payable
by
virtue
of
two
pre-existing
orders
and
a
written
agreement
between
the
parties,
having
the
force
of
an
order
for
enforcement
purposes,
and
that
no
new
rights
or
entitlements
were
established.
Further,
that
the
existing
orders
were
not
rescinded
and
remain
in
full
force
and
effect.
In
the
alternative,
only
the
additional
amount
of
maintenance
comprised
of
the
extra
$225
per
month
($75
for
each
of
the
three
children)
should
be
taxable
as
the
appellant
always
had
the
right
to
receive
$225
per
month
prior
to
February
10,
1988.
Counsel
for
the
respondent
submitted
that
the
entire
amount
of
$450
per
month
is
taxable
from
June
27,1990
onwards
because
the
payments
made
to
the
appellant
for
the
maintenance
of
her
children
were
payments
that
were
made
pursuant
to
an
order
of
a
competent
tribunal,
in
accordance
with
the
laws
of
the
province,
dated
later
than
February
10,
1988.
It
is
necessary
to
examine
the
meaning
of
the
phrase,
“pursuant
to
an
order".
The
Federal
Court
of
Appeal
in
The
Queen
v.
Sills,
[1985]
1
C.T.C.
49,
85
D.T.C.
5096
at
page
52
(D.T.C.
5098)
noted:
The
Shorter
Oxford
Dictionary
defines”
pursuant”,
inter
alia,
as
"in
accordance
with".
The
fifth
edition
of
Black's
Law
Dictionary
defines
“
pursuant”,
inter
alia,
as
"to
execute
or
carry
out
in
accordance
with
or
by
reason
of
something”.
It
also
defines"
pursuant
to”
inter
alia,
as
follows:
"pursuant
to"
means
"in
the
course
of
carrying
out;
in
conformance
to
or
agreement
with;
according
to”.
There
is
little
doubt
that
on
the
30th
day
of
each
month,
following
the
making
of
the
order
of
Judge
Barnett
on
June
27,
1990
that
the
payor
would
have
good
reason
to
believe
that
each
time
he
made
his
payment
of
$450
that
he
was
doing
so
"pursuant
to”
or
“in
accordance
with"
that
order.
Unlike
section
56.1(1)
of
the
Income
Tax
Act
which
uses
the
phrase,
"or
any
variation
thereof"
to
modify
the
preceding
reference
to
“a
decree,
order,
judgment
or
written
agreement",
paragraph
56.(1)(c.1)
does
not
contain
any
reference
to
variation.
However,
there
is
no
particular
magic
in
the
term
"variation"
as
it
pertains
to
the
making
of
an
order
by
a
competent
tribunal.
Collier,
J.,
of
the
Federal
Court-Trial
Division,
in
his
judgment
in
Horkins
v.
The
Queen,
[1976]
C.T.C.
52,
76
D.T.C.
6043
at
page
55-56
(D.T.C.
6046)
stated:
Without
attempting
an
all-encompassing
interpretation,
I
think
"order"
contemplates
at
least
some
concrete
pronouncement,
decree,
or
direction
of
the
tribunal
in
question.
The
order
of
June
27,
1990
issued
by
Judge
Barnett
recites
the
existence
of
a
previous
order
dated
November
3,
1975
wherein
the
payor
was
to
pay
mainte-
nance
in
the
sum
of
$75
per
month
for
a
named
child.
It
also
recites
another
order,
flowing
from
a
consent
between
the
parties,
wherein
the
payor
is
ordered
to
pay
maintenance
in
the
sum
of
$75
per
month
for
another
named
child.
Further,
it
recites
the
existence
of
a
written
agreement
between
the
parties,
dated
February
8,
1988,
having
been
filed
on
March
1,
1988
in
Williams
Lake
Provincial
Court
Registry,
pursuant
to
section
74
of
the
Family
Relations
Act,
wherein
the
payor
agreed
to
pay
the
sum
of
$75
per
month
for
the
maintenance
of
another
named
child.
The
order
of
June
27,1990
further
recites
that
the
appellant,
Donna
M.
Hill,
applied
for
an
increase
in
maintenance
for
all
three
of
the
aforesaid
children.
Also,
it
states
that
the
payor,
David
Cox,
applied
to
rescind
and/or
vary
the
existing
orders
of
maintenance
to
the
sum
of
one
dollar
per
month.
The
order
then
reads:
THIS
COURT
ORDERS
that
the
maintenance
payable
by
the
respondent,
David
Keith
Cox,
to
the
applicant,
Donna
Marie
Hill,
for
each
of
the
three
aforesaid
children
is
increased
to
the
sum
of
$150
per
month
for
each
child
on
the
last
day
of
each
month,
commencing
the
30th
day
of
June,
1990.
The
transcript
of
the
reasons
for
judgment
of
His
Honour
Judge
Barnett
was
filed
as
Exhibit
A-6.
At
the
bottom
of
page
three
of
those
reasons,
Judge
Barnett
states:
In
the
result
there
will
be
an
order
that
David
Cox
pay
maintenance
for
each
of
the
three
children
in
the
amount
of
$150/month.
/
believe
that
Donna
Hill
really
needs
even
more
than
this,
but
she
can
get
by
with
this
total
amount
and
David
Cox’s
situation
probably
will
not
permit
greater
payments.
His
Honour,
after
ordering
the
payor
to
make
a
one-time
payment
of
$600
then
goes
on
to
state:
The
order
requiring
increased
monthly
payments
is
to
take
effect
in
June,
1990.
It
should
be
noted
that
certain
underlining
which
appears
in
the
order
(Exhibit
A-5)
and
the
reasons
for
judgment
(Exhibit
A-6)
were
not
in
the
original
and
have
been
added
thereafter
for
emphasis
by
someone.
It
is
apparent
that
the
previous
orders
and
the
written
agreement
filed
at
the
Provincial
Court
Registry
were
not
affected
by
the
order
of
June
27,
1990
with
regard
to
matters
of
declaration
of
paternity
or
custody
of
the
children.
The
question
is
whether
or
not
the
making
of
the
new
order
had
the
effect
of
eliminating
the
entitlement
to
child
maintenance
which
flowed
from
the
three
separate
orders
(the
agreement
being
enforceable
as
though
it
had
originally
been
an
order
of
the
Court)
or
did
it
merely
enlarge
the
amount
payable
to
the
appellant
without
disturbing
the
basic
foundations
of
those
previous
orders.
Following
the
making
of
the
order
of
June
27,
1990,
if
the
payor
had
fallen
into
arrears
and
enforcement
was
necessary,
it
is
reasonable
to
assume
that
the
application
for
compliance
with
the
order
would
be
based
on
that
very
document
and
not
on
the
previous
orders,
which
in
combination,
entitled
the
appellant
to
receive
a
total
of
$225
per
month.
But,
having
specifically
dealt
with
an
application
by
the
appellant
to
vary
those
previous
orders,
and
in
rejecting
an
application
by
the
payor
to
rescind
them
or
to
reduce
payments
to
$1
per
month,
was
Judge
Barnett,
by
ordering
the
payor
to
make
payments
to
a
total
of
$450
per
month,
establishing
a
new,
fresh
obligation
upon
the
payor?
If
one
asks
the
question:
what
amount
did
the
appellant
receive
as
a
result
of
having
obtained
the
order
of
June
27,
1990
—
then
the
answer
would
be:
she
received
an
extra
$150
per
month.
Because
of
that
order,
she
doubled
her
previous
maintenance
entitlement.
Without
that
order
she
would
have
been
able
to
receive
the
sum
of
$225
per
month
maintenance
for
the
three
children
on
an
ongoing
basis.
An
order
of
a
competent
tribunal
is
more
than
a
direction
—
it
is
a
command,
enforceable
by
that
tribunal
or
another
one
having
jurisdiction.
The
payor
had
previously
been
compelled
to
pay
$225
per
month
and
the
new
order
reinforced
that
requirement
and
superimposed,
not
a
new
liability,
but
a
heavier
burden.
The
previous
orders
were
not
explicitly
rescinded
and
in
fact
would
not
be
revoked
inasmuch
as
they
dealt
with
matters
other
than
maintenance.
However,
having
recognized
the
existence
of
those
orders
requiring
maintenance
to
be
paid,
the
new
order
commands
an
"increase
to
the
sum
of
$150
per
month
for
each
child”.
The
command
to
pay
that
particular
sum
would
be
equally
as
effective
had
there
been
no
reference
whatsoever
to
the
award
as
representing
an
"increase".
In
that
sense
it
can
be
said
to
be”
subsumptive”,
as
it
includes
a
class
or
category
belonging
to
it.
The
contention,
then,
that
the
amount
payable
"pursuant
to"
the
order
of
June
27,
1990
is
only
the
amount
of
the
increased
maintenance,
would
require
a
limitation
of
the
definition
of
that
phrase
to
embrace
only
that
amount,
found
to
flow
as
a
separate
stream,
directly
as
a
consequence
of
the
increase
commanded
by
the
fresh
order.
The
jurisprudence,
in
my
view,
does
not
support
that
narrowing
process.
The
particular
charging
paragraph
56(1)(c.1)
requires
to
be
included
into
income,
any
amount
received
by
the
taxpayer
in
the
year,
pursuant
to
an
order
made
by
a
competent
tribunal
in
accordance
with
the
laws
of
a
province,
as
an
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
taxpayer,
the
children
of
the
taxpayer
or
both
the
taxpayer
and
the
children
of
the
taxpayer
if
the
order
was
made
after
February
10,
1988
and
certain
other
conditions
are
met,
none
of
which
are
at
issue
in
this
appeal.
The
section
does
not
provide
that
the
amount
to
be
included
into
income
pursuant
to
an
order
made
after
February
10,
1988
is
only
that
amount
which
represents
an
increase
to
amounts
previously
received
pursuant
to
pre-existing
maintenance
orders.
The
incongruous
and
inequitable
result
which
flows
under
the
section
as
presently
worded
is
that
a
payor,
having
obligations
under
an
order
effective
prior
to
February
10,
1988,
can
apply
to
a
court
for
the
right
to
pay
an
increased
amount
pursuant
to
a
new
order
and
thereby
render
the
entire
amount
deductible
to
him
and
taxable
in
the
hands
of
the
recipient.
What
is
even
worse,
is
that
a
new
order
reducing
the
amount
payable
would
still
be
seen
as
establishing,
by
confirmation
or
subsumption,
a
requirement
to
pay
and
payments
made
would
similarly
be
"pursuant
to"
that
new
direction
of
a
court.
The
result
would
be
that
the
reduced
amount
would
be
fully
taxable
in
the
hands
of
the
recipient
when
previously,
the
greater
amount,
having
been
received
as
a
consequence
of
orders
made
prior
to
February
10,
1988,
would
not
have
been
included
into
income.
The
anomaly
is
another
example
of
the
pitfalls
which
await
individuals
who
attempt
to
arrange
their
financial
affairs
so
as
to
provide
for
the
care
and
maintenance
of
children
with
having
any
reason
to
expect
such
drastic
tax
consequences
flowing
from
their
best
efforts.
Similarly,
one
cannot
expect
members
of
the
Judiciary,
having
jurisdiction
in
family
matters,
to
draft
specific
orders
with
a
view
to
satisfying
the
Income
Tax
Act.
In
examining
the
order
of
Judge
Barnett,
dated
June
27,
1990,
in
a
manner
to
give
effect
to
the
contention
of
the
appellant,
it
would
be
necessary
to
find
that
it
was
the
clear
intention
of
the
Court
that
previous
orders
requiring
payment
of
maintenance
were
to
be
preserved
and
that
they
could
continue
to
exist
on
a
stand-alone
basis
for
the
purposes
of
entitlement
and
enforcement
of
maintenance
so
that,
with
the
addition
of
the
new
order,
which
commanded
an
increase,
the
appellant
would
have
four
separate
maintenance
orders.
It
would
require
rather
sophisticated
accounting
principles
of
FIFO
—
First
In,
First
Out
and
LIFO
—
Last
In,
First
Out,
in
order
to
determine
if
a
payment
of
$150
was
pursuant
to,
and
in
full
satisfaction
of
two
previous
orders,
or
was
to
be
applied
towards
the
order
of
June
27,
1990.
Or,
with
respect
to
the
full
payment
of
$450
that
was
made
on
June
30,
can
it
be
said
that
the
sum
of
$75
was
paid
"pursuant
to"
the
order
of
November
3,
1975,
another
$75
was
paid
pursuant
to"
the
order
of
September
28,1978,
another
$75
was
paid
pursuant
to"
the
written
agreement
(having
the
effect
of
an
order)
dated
February
8,
1988
and
the
balance
of
$225
was
paid
"pursuant
to"
the
order
of
June
27,
1990
in
order
to
comply
with
the
command:
this
Court
orders
that
the
maintenance
payable
.
.
.
for
each
of
the
three
children
.
.
.
is
increased
to
the
sum
of
$150
per
month
for
each
child.
Clearly,
it
was
intended
that
after
June
27,
1990,
having
recognized
previous
entitlements
to
maintenance
flowing
from
previous
orders,
the
maintenance
payable
would
be
in
the
sum
of
$450
per
month
and
would
be
payable
as
a
consequence
of
and
in
conformity
with
that
particular
order.
Although
it
was
as
a
consequence
of
an
application
to
vary
existing
orders,
it
was
very
much
an“
"order",
as
contemplated
by
the
Income
Tax
Act
and
defined
by
jurisprudence.
The
result,
for
the
appellant,
is
inequitable.
However,
the
wording
of
the
Income
Tax
Act
and
the
relevant
jurisprudence
leads
to
that
end.
To
do
otherwise
would
be
to
indulge
in
a
rewording
of
the
section
or
redefinition
of
the
phrase
"pursuant
to"
in
a
manner
contrary
to
existing
jurisprudence.
The
appeal
is
hereby
dismissed.
Appeal
dismissed.
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