Guèvremont v. R., [1998] 3 CTC 2578

Tardif T.C.J.:

This is an appeal from assessments for 1992, 1993 and 1994. The appellant asked that his appeal be heard pursuant to the informal procedure.

The facts giving rise to the appeal are the following. In 1989 the

appellant and his wife separated. They made an agreement titled [TRANSLATION] “de facto separation agreement”. The agreement provided for custody of the two minor children, Sarah and Ann-Sophie, how this was to be exercised and alimony. The agreement also defined the division of various property such as the family home, the car arid furniture.

At the time the agreement was signed on May 29, 1989, the bi-monthly

alimony for the children was set at $190. All went as expected until Ann- Sophie was given a very bad medical diagnosis. The very serious illness from which Aim-Sophie suffered resulted in several major upheavals in the parents’ way of life. In 1992 the alimony was increased to $700 a month. Ann-Sophie’s state of health continued to deteriorate and the appellant’s ex-wife decided to spend all her time with their seriously ill child. After leaving her job she had no further income and settled with the children in the former family home, while the appellant went to live with his parents.

As a result of these major changes in the life of the family unit, the appellant assumed all costs relating to accommodation such as taxes, telephone, electricity, heating, cable and maintenance. He also paid all the medical expenses for the family unit, including those required by Ann- Sophie, the cost of which was prohibitive. In addition he paid the costs for Sarah’s education. On top of these expenses were those for clothing, insurance and so on. This assumption of all the aforementioned expenses lasted from March 1992 to April 1995, as Ann-Sophie died on April 3, 1995.

Throughout this period, the original agreement was never altered or amended.

The Department did not in any way question the deductibility of the amount of the alimony paid. The only issue was whether during the periods, at issue the appellant could claim, in addition to the alimony he paid, the benefits reserved for and assigned to a person who is responsible for dependants.

The law is quite clear and not open to any interpretation. A person paying alimony absolutely cannot rely on the provisions of the Act covering dependants. By a legal fiction, the act of paying alimony and deducting it from income deprives the spouse or parent of the child for whom the alimony is paid of that status. In other words, Parliament withdrew the status of parent and spouse from a person paying alimony who is claiming tax benefits from doing so. This loss of the status of parent or spouse is Clearly stated in the wording of s. 118(5) of the Income Tax Act, which reads as follows:

(5) Alimony and maintenance. Where an individual in computing the individual’s income for a taxation year is entitled to a deduction under paragraph 60(b), (c) or (c. 1 ) in respect of a payment for the maintenance of a spouse or child, the spouse or child shall, for the purposes of this section (other than the definition “qualified pension income” in subsection (7) be deemed not to be the spouse or child of the individual. (My emphasis.)

It is neither necessary nor desirable to repeat or restate the wording of this section each time there is a question as to the rights and benefits enjoyed by a taxpayer who has dependants, and who benefits from the deduction associated with the payment of alimony.

This is the basis of the appellant’s appeal: he thought he was entitled to deduct the expenses which he paid for his family in addition to the amount paid and claimed for as alimony.

The exclusion is quite clear and does not require any repetition.

The appellant maintained he was entitled to the benefits disallowed by relying on the content of Interpretation Bulletin IT-513, February 3, 1989, regarding s. 118(1), as well as ss. 56, 118.8 and 117.1, ss. 118(2), (4), (5) and (6), 25(2) and (6), 248(1) and 252(1) and 60(b), (c) and (c.1). In particular, he based his arguments on the following references:

5 Since the Act does not contain a definition of the word “support”, the word, where it appears in subsection 118(1), takes its ordinary meaning. This support is not necessarily something that is given voluntarily but includes support of another person under a legal commitment.

6 Where a person who is the spouse or dependant of a taxpayer is confined to hospital for all or substantially all of the year because of mental or physical infirmity and the cost of hospitalization is paid by a provincial government, board or commission under a provincial hospital plan, the latter fact, in itself, does not necessarily mean that that person was not supported by the taxpayer. If costs such as clothing, comforts and medical and hospital plan premiums were paid by the taxpayer or the taxpayer supported that person on those occasions when the latter was able to be out of hospital, then, subject to the limitations relating to the spouse’s or dependant’s income, ordinarily it is recognized that the taxpayer supported that person.

15 For purposes of the medical expense tax credit, a person qualifies as a “dependant” of the individual for a particular taxation year if the following conditions are met:

(a) The person must be the child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece or nephew of the individual or of the individual’s spouse.

(b) The person must be dependent on the individual for support at some time in the year.

The appellant reads the Interpretation Bulletin in a literal and textual manner without bearing s. 118(5) of the Act in mind, as he must in this context.

I cannot accept the appellant’s interpretation or subscribe to his approach, which is absolutely not admissible under the applicable legislation, which is very clear. Moreover, a legal text often has to be read bearing in mind a provision or definition placed elsewhere in the Act by Parliament.

The Income Tax Act is very clear on this point: the appellant could not claim the tax benefits associated with payment of the alimony and also deduct the expenditure made on support in addition to that on alimony. In other words, the fact of deducting an amount from his income as alimony caused him to lose his right to any other deduction for expenses for the family unit covered by the alimony.

For these reasons, I must dismiss the appeal.

Appeal dismissed.