Guy
Tremblay:—This
case
was
heard
in
Toronto,
Ontario,
on
April
1,
1980.
1.
The
Point
at
Issue
The
point
at
issue
is
whether
the
amounts
of
$1,758
and
$1,771
must
be
included
in
the
appellant’s
income
for
the
taxation
years
1975
and
1976.
These
amounts
were
received
from
her
ex-husband
following
a
written
agreement
of
separation.
2.
Burden
of
Proof
The
burden
is
on
the
appellant
to
show
that
the
respondent’s
assessments
are
incorrect.
This
burden
of
proof
results
particularly
from
several
judicial
decisions,
including
the
judgment
delivered
by
the
Supreme
Court
of
Canada
in
R
W
S
Johnston
v
MNR,
[1948]
CTC
195;
3
DTC
1182.
3.
The
Facts
3.01
The
facts
are
not
in
dispute
and
are
well
summarized
in
the
reply
to
the
notice
of
appeal,
paragraphs
2,
3
and
4.
3.02
These
paragraphs
read
as
follows:
2.
In
filing
her
returns
of
income
for
the
1975
and
1976
taxation
years,
the
appellant
failed
to
include
in
her
income
as
alimony
received
the
sums
of
$1,758
and
$1,771
respectively.
3.
By
notices
or
reassessment
the
respondent
included
in
the
appellant’s
income
for
the
1975
and
1976
taxation
years
the
sum
of
$1,758
and
$1,771
respectively.
4.
In
assessing
tax
as
aforesaid
the
respondent
relied
upon
the
following
findings
or
assumptions
of
fact:
(a)
the
appellant
and
her
spouse,
Donald
Victor
Brooke,
have
lived
separate
and
apart
since
about
May
1,
1974;
(b)
on
May
3,
1975,
the
appellant
and
her
spouse
executed
a
written
separation
agreement
which
stipulated:
(i)
the
husband
was
required
to
pay
to
the
wife
for
her
maintenance
as
periodic
payments
within
the
meaning
of
the
Income
Tax
Act
the
bi-monthly
sum
of
$125
on
the
10th
and
25th
days
of
each
month
commencing
on
the
10th
day
of
May,
1974;
(clause
3)
(ii)
the
husband
was
required
to
pay
to
the
wife
for
maintenance
for
each
of
the
children
as
periodic
payments
within
the
meaning
of
the
Income
Tax
Act
the
bi-monthly
sum
of
$50
on
the
10th
and
25th
days
of
each
month
commencing
on
the
10th
day
of
May,
1974;
(clause
4)
(iii)
the
amount
of
maintenance
payments
required
to
be
made
by
the
husband
for
the
children
pursuant
to
the
agreement
was
to
be
increased
or
decreased
at
one
year
intervals.
The
amount
of
increase
or
decrease
was
to
be
pro-rated
to
the
direct
proportionate
increase
or
decrease
for
each
one
year
interval
and
in
the
Annual
Average
of
the
Consumer
Price
Index
published
by
Statistics
Canada;
(clause
5)
(iv)
the
wife
would
be
entitled
to
remain
in
sole
occupancy
of
the
former
matrimonial
home
presently
registered
in
the
name
of
the
husband
alone
so
long
as
the
wife
was
entitled
to
maintenance
or
until
the
youngest
child
attained
the
age
of
eighteen
years
whichever
would
occur
first.
When
the
wife
was
no
longer
entitled
to
occupy
the
home,
it
would
be
sold
by
the
husband,
and
he
would
pay
to
the
wife
one-half
of
the
net
proceeds
of
the
sale.
So
long
as
the
wife
was
in
occupancy
of
the
home,
she
would
be
entirely
responsible
for
payments
of
mortgage,
principal
and
interest,
municipal
realty
taxes,
and
routine
maintenance,
but
the
husband
would
be
responsible
for
any
major
repairs
provided
that
no
such
repairs
would
be
undertaken
without
his
prior
approval
provided
however
the
husband
would
pay
to
his
wife
one-half
of
any
increase
in
mortgage
payments
after
September,
1976;
(clause
6)
(c)
pursuant
to
clauses
3
and
4
of
the
aforesaid
separation
agreement
the
appellant’s
spouse
paid
her
the
sum
of
$6,600
in
each
of
the
1975
and
1976
taxation
years;
(d)
the
aforesaid
payments
made
by
the
appellant’s
spouse
were
amounts
received
by
the
appellant
in
the
1975
and
1976
taxation
years,
pursuant
to
a
written
agreement,
as
alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
both
the
appellant
and
the
children
of
the
marriage.
3.03
The
said
written
separation
agreement
was
filed
as
Exhibit
A-1.
The
clauses
3,
4,
5
and
6
read
as
follows:
3.
During
their
joint
lives
the
husband
will
pay
to
the
wife
for
her
maintenance
as
periodic
payments
within
the
meaning
of
the
Income
Tax
Act
(Canada)
the
bimonthly
sum
of
$125
on
the
10th
and
25th
days
of
each
month
commencing
on
the
10th
day
of
May,
1974.
These
payments
shall
continue
so
long
as
the
parties
live
separate
and
apart
and
so
long
as
the
wife
is
not
remarried
and
so
long
as
the
wife
in
not
living
with
an
adult
male
person
in
a
husband-and-wife
type
of
relationship.
4.
During
his
lifetime
the
husband
shall
pay
to
the
wife
for
maintenance
for
each
of
the
children
as
periodic
payments
within
the
meaning
of
the
Income
Tax
Act
(Canada)
the
bi-monthly
sum
of
$50
on
the
10th
and
25th
days
of
each
month
commencing
on
the
10th
day
of
May,
1974.
These
payments
shall
continue
for
each
child
until
he
or
she
reaches
the
age
of
18
years
or
until
the
age
of
21
years
provided
the
child
continues
to
reside
with
his
wife
and
is
in
regular
attendance
at
an
institution
of
learning
or
until
the
child
marries
or
dies,
whichever
may
occur
first.
5.
The
amount
of
the
maintenance
payments
required
to
be
made
by
the
husband
for
the
children
pursuant
to
this
Agreement
shall
be
increased
or
decreased
at
one-year
intervals,
the
first
of
such
increases
or
decreases
to
be
made
on
the
10th
day
of
May,
1976,
and
the
payments
in
the
increased
or
decreased
amount
shall
continue
to
be
made
by
the
husband
subject
to
the
terms
of
this
Agreement,
for
the
next
succeeding
one
year,
and
so
on
from
time
to
time
at
each
succeeding
one-year
interval,
provided
that:
(i)
The
amount
of
increase
or
decrease
in
payments
shall
be
pro
rated
to
the
direct
proportionate
increase
or
decrease
for
each
one-year
interval
in
the
Annual
Average
of
the
Consumer
Price
Index
published
by
Statistics
Canada
for
“ALL
ITEMS”
for
the
City
of
Toronto.
(ii)
If
the
Consumer
Price
Index
at
any
time
in
the
future
is
no
longer
published
by
Statistics
Canada
or
any
other
ministry,
branch,
department,
bureau
or
agency
of
the
Federal
Government
of
Canada,
then
for
the
purposes
of
this
Agreement,
the
increase
or
decrease
in
payments
as
provided
herein
shall
be
based
on
whichever
set
of
statistics
the
Federal
Government
may
then
use
for
official
purposes.
(iii)
If
the
Consumer
Price
Index
is
at
any
time
in
the
future
calculated
and
published
on
any
basis
other
than
is
presently
employed
then
the
amount
of
increase
or
decrease
in
payments
as
provided
herein
shall
be
based
upon
the
then
existing
published
figures
with
an
appropriate
adjustment
for
the
alteration
in
the
method
of
calculation.
(iv)
In
any
event
there
shall
be
no
increase
or
decrease
in
payments
as
provided
herein
in
excess
of
10
percent
in
any
one
year
from
the
preceding
year.
6.
The
wife
will
be
entitled
to
remain
in
sole
occupancy
of
the
former
matrimonial
home
at
14
Linwood
Avenue,
Agincourt,
Ontario,
presently
registered
in
the
name
of
the
husband
alone
so
long
as
the
wife
is
entitled
to
maintenance
or
until
the
youngest
child
attains
the
age
of
eighteen
years
whichever
may
occur
first.
When
the
wife
is
no
longer
entitled
to
occupy
the
home,
it
will
be
sold
by
the
husband,
and
he
will
pay
to
the
wife
one-half
of
the
net
proceeds
of
the
sale.
So
long
as
the
wife
is
in
occupancy
of
the
home,
she
will
be
entirely
responsible
for
payments
of
mortgage
principal
and
interest,
municipal
realty
taxes
and
routine
maintenance,
that
the
husband
will
be
responsible
for
any
major
repairs,
provided
that
no
such
repairs
will
be
undertaken
without
his
prior
approval
provided
however
that
the
husband
will
pay
to
the
wife
one-half
of
any
increase
in
mortgage
payments
after
September,
1976.
3.04
The
amounts
of
$1,758
(1975)
and
$1,771
(1976)
which
are
in
dispute,
were
in
fact
one-half
of
the
cost
of
maintaining
the
house,
as
is
clearly
expressed
in
the
notice
of
objection
filed
with
the
income
tax
returns
forwarded
to
this
Board
by
the
respondent.
4.
Law—Cases—Comments
4.1
Law
Paragraph
56(1
)(b)
reads
as
follows:
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year.
(b)
any
amount
received
by
the
taxpayer
in
the
year,
pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
agreement,
as
alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof,
children
of
the
marriage,
or
both
the
recipient
and
children
of
the
marriage,
if
the
recipient
was
living
apart
from,
and
was
separated
pursuant
to
a
divorce,
judicial
separation
or
written
separation
agreement
from,
the
spouse
or
former
spouse
required
to
make
the
payment
at
the
time
the
payment
was
received
and
throughout
the
remainder
of
the
year;
4.2
Precedent
Cases
The
counsel
for
the
respondent
referred
to
the
following
cases:
1.
HMQ
v
Morton
Pascoe,
[1975]
CTC
58;
75
DTC
5024;
2.
Richard
A
Hastie
v
MNR,
[1972]
CTC
2383;
72
DTC
1335.
4.3
Comments
4.3.1
The
first
point
is
whether
the
amounts
in
dispute
are
“amounts
received’’
within
the
wording
of
paragraph
56(1)(b)
quoted
above.
In
the
Board’s
opinion
there
is
no
doubt
that
the
payments
meet
the
requirements
of
the
said
section.
During
the
hearing
there
was
no
dispute
about
that.
4.3.2
The
amounts
received
from
her
ex-husband
must
be
included
in
the
computation
of
the
appellant’s
income.
4.3.3
The
other
point
is
whether
the
appellant
in
the
computation
of
her
income,
may
deduct
amounts
of
$1,758
(1975)
and
$1,771
(1976)
as
expenses
to
maintain
the
house.
They
are
personal
expenses
and
there
is
nothing
in
section
8,
nor
in
Subdivision
e
of
Part
I
of
the
Act
(Sections
60
to
66),
nor
anywhere
else
in
the
Act
which
can
authorize
such
a
deduction.
The
Board
is
bound
by
the
wording
of
the
Income
Tax
Act.
It
cannot
allow
those
expenses
even
if
it
appears
not
according
to
equity.
The
Income
Tax
Act
is
not
necessarily
a
law
of
equity.
The
Tax
Review
Board
is
not
the
legislator,
it
is
a
tribunal
which
must
construe
the
Act
as
it
is
written.
5.
Conclusion
The
appeal
is
dismissed
in
accordance
with
the
above
reasons
for
judgment.
Appeal
dismissed.
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