Watson,
D.T.C.C.J.:—This
appeal
was
heard
at
Montréal,
Quebec,
on
September
27,
1993.
In
computing
income
for
the
1990
taxation
year,
the
appellant
deducted
the
amount
of
$7,738.46
for
legal
fees.
In
assessing
the
appellant
on
August
23,
1991,
for
the
1990
taxation
year,
the
Minister
of
National
Revenue
disallowed
this
amount.
In
her
notice
of
objection
dated
November
13,1991,
the
appellant
stated
as
follows:
A
claim
of
$7,738.46
made
on
line
232
for
legal
fees
incurred
to
collect
late
alimony
payments
was
refused.
As
the
alimony
is
taxable,
the
legal
fees
that
had
to
be
incurred
to
collect
payments
in
default
should
be
an
allowable
deduction.
In
her
notice
of
appeal
dated
January
14,
1993,
the
appellant
stated
as
follows:
Please
note
also
that
I
claimed
on
my
tax
form
for
1990
$7,738.46
for
legal
fees
regarding
alimentary
allowance;
NOT,
as
you
have
stated
in
your
notification
of
confirmation
by
the
Minister”.
.
.
for
the
purpose
of
gaining
or
producing
income
from
business
or
property
.
.
.”
In
assessing
the
appellant,
the
Minister
of
National
Revenue
made
the
following
assumptions
of
fact:
(a)
the
legal
fees
in
the
amount
of
$7,738.46
were
incurred
by
the
appellant
for
a
court
action
regarding
her
divorce;
(b)
the
legal
fees
mentioned
in
paragraph
(a)
were
not
incurred
for
the
purpose
of
gaining
or
producing
income
from
a
business
or
property,
but
were
personal
or
living
expenses
of
the
appellant;
(c)
the
said
legal
fees
were
not
incurred
to
recuperate
alimony
payments;
The
question
to
be
resolved
is
whether
the
legal
fees
in
the
amount
of
$7,738.46
are
a
proper
deduction
in
computing
the
appellant’s
income
for
the
1990
taxation
in
light
of
paragraph
18(1)(a)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
Case
law
In
the
case
of
The
Queen
v.
Burgess,
[1981]
C.T.C.
258,
81
D.T.C.
5192
(F.C.T.D.),
a
taxpayer
sought
to
deduct
from
her
income
legal
fees
incurred
in
obtaining
maintenance
for
herself
and
her
children
as
part
of
a
divorce.
The
deduction
was
refused
by
the
Court.
At
page
265
(D.T.C.
5197),
Cattanach,
J.
stated
as
follows:
In
Evans
v.
M.N.R.,
[1960]
S.C.R.
391,
[1960]
C.T.C.
69,
60
D.T.C.
1047,
the
appellant
had
an
existing
right
to
the
income
and
expended
the
legal
fees
to
obtain
payment
of
that
income
which
was
denied
her.
The
suit
was
for
income.
In
the
present
case
the
defendant's
right
to
maintenance
which
arose
on
marriage
ended
with
the
divorce
and
her
right
to
subsequent
maintenance
arose
from
the
court
order.
The
suit
was
for
divorce
and
corollary
thereto
and
award
of
maintenance.
Therefore
the
legal
expenses
are
in
the
nature
of
a
capital
expenditure,
by
bringing
the
right
into
being,
rather
than
in
the
nature
of
a
revenue
expenditure
to
enforce
payment
of
income
from
a
right
in
being.
In
the
case
of
Filteau
v.
M.N.R.,
[1991]
1
C.T.C.
2159,
91
D.T.C.
509
(T.C.C.),
the
taxpayer
appealed
a
decision
of
the
Minister
of
National
Revenue
which
refused
a
deduction
for
legal
fees
incurred
to
obtain
a
divorce
decree
and
an
order
requiring
her
former
husband
to
continue
paying
her
an
alimentary
pension.
At
page
2160
(D.T.C.
510),
Chief
Judge
Couture
stated
as
follows:
The
pension
that
she
was
receiving
for
herself
and
her
children
resulted
solely
from
the
existence
of
the
marriage
between
herself
and
her
husband,
and
as
long
as
this
marriage
was
not
dissolved
by
a
decree
divorcing
them,
her
husband
was
legally
obliged
to
pay
her
this
allowance.
This
obligation
results
from
article
633
of
the
Quebec
Civil
Code,
which
provides
that:
Spouses,
and
relatives
in
the
direct
line,
owe
each
other
support.
(The
word
"aliments"
is
translated
in
the
English
version
by
the
word
"support".)
In
the
event
of
a
divorce
between
the
spouses
this
legal
obligation
terminates,
because
the
marriage
has
been
dissolved.
The
situation
of
the
couple
is
then
governed
by
the
provisions
of
the
Civil
Code
and
the
Divorce
Act,
R.S.C.
1985
(2d
Supp.),
c.
3.
At
page
2161
(D.T.C.
511),
he
further
stated
as
follows:
Considering
the
evidence
and
precedents
to
which
I
have
referred,
I
do
not
hesitate
to
accept
the
position
of
counsel
for
the
respondent.
This
position
is
supported
by
the
facts,
because
the
professional
fees
that
the
appellant
paid
were
to
contest
her
husband’s
divorce
petition
and
to
obtain
support,
since
the
alimentary
pension
that
he
had
paid
her
following
their
legal
separation
in
1981
was
ending.
She
was,
therefore,
establishing
a
right
to
this
support
and
not
acting
to
enforce
its
payment.
This
expense
was
therefore
not
incurred
in
order
to
earn
income
from
property
pursuant
to
the
requirements
of
paragraph
18(1)(a).
Facts
The
appellant
was
the
only
witness
to
give
evidence
at
the
hearing.
In
1989,
the
appellant
was
a
party
to
an
action
regarding
her
divorce
from
Robert
Yvan
(Ron)
Meisels.
The
divorce
decree
dated
September
13,
1989,
provided,
amongst
other
things,
for
the
payment
to
the
appellant
for
the
support
and
maintenance
of
the
two
children
Susan
and
David
an
alimentary
pension
of
$1,700
per
month.
The
lawyer's
account
for
his
fees
was
sent
to
the
appellant
in
1989
and
the
appellant
issued
three
cheques
in
1990
as
follows:
$4,000
dated
June
26,
1990,
$2,500
dated
August
15,
1990
and
$1,207.44
dated
September
1,
1990,
for
a
total
of
$7,707.44.
The
parties
to
the
action
had
agreed
to
pay
their
own
costs.
This
pension
was
paid
to
the
appellant
without
interruption
from
the
date
of
the
decree
and
during
all
of
1990.
Decision
The
appellant's
submission
that
the
legal
fees
were
incurred
to
collect
late
alimony
payments
was
not
substantiated
by
the
evidence.
She
received
the
payments
as
part
of
the
divorce
action.
The
divorce
action
was
not
to
recuperate
alimony
that
had
not
been
paid
but
was
to
establish
a
right
to
the
payments
that
she
in
fact
received.
In
the
light
of
the
existing
case
law,
I
am
satisfied
that
the
appellant
has
not
succeeded
in
her
onus
of
establishing
on
a
balance
of
probabilities
that
the
Minister
of
National
Revenue's
decision
to
disallow
the
deduction
of
$7,738.46
for
the
1990
taxation
year
was
ill-founded
in
fact
and
in
law.
Accordingly
the
appeal
is
dismissed.
Appeal
dismissed.
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