Dennis v. Wilson, [1999] 2 CTC 175

McKinlay J.A.:

This is a motion by the appellant for an addendum to the reasons of this court released on November 17, 1997. Those reasons were in an appeal from a decision of the Honourable Mr. Justice Walsh dated June 15, 1995, varying a divorce judgment of the Honourable Judge Gotlib with respect to child support only. The final portion of our reasons read that we would “set aside the judgment below, and replace it with a judgment with monthly child support payments as stated above, but with all other terms to remain unchanged.”

In so doing, we decreased the child support payments with the intent that the appropriate amounts would be paid monthly by the father, that he would deduct those payments for income tax purposes, and that the mother would include the payments in her income for tax purposes.

In conferring with Revenue Canada, counsel for the appellant father was unable to obtain a binding tax ruling. However, Revenue Canada did cooperate to the extent of advising the father’s counsel of its interpretation of the Income Tax Act as amended. We also had the assistance of an opinion of the tax consequences of our decision, based on letters from Revenue Canada, from Alan M. Schwartz, Q.C.

If the provisions of the Act prior to the amendments were applied to our decision, the intent of our decision, and the basis on which the amount of the monthly payments was determined, would be fulfilled, that is, the father would deduct the amounts paid from his income for tax purposes, and the mother would include the amounts received in her income for tax purposes. However, Revenue Canada interprets the amendments to the Act to mean that amounts paid cannot be deducted from income by the father, and that amounts received should not be included in income by the mother.

Revenue Canada’s interpretation is based solely on the meaning of the word “made”, as it refers to the timing of orders of the court. There is no definition of that word in the Act; thus, its meaning is the sole issue which we wish to address in these reasons. The problem which arises in this case is one which is confined to appeals, and only to those appeals where the date of the order being appealed is prior to and the date of the decision of the appeal court is subsequent to the “commencement date” of the new regime under the Act. The Act does not specifically deal with this problem, and it is one which will work its way out of the system over a reasonably short period of time.

It is our intent that our decision on this motion apply only to appeals of support orders where the appeal court alters the amount to be paid as ordered by the lower court. In such a case, the order of the appeal court replaces the order of the lower court, and speaks as of that date. This is im- portant for more reasons than that of income tax; it also speaks to the question of arrears or overpayment of support orders.

In 1985, in Richardson v. Richardson (1985), 1 R.F.L. (3d) 67 (Ont. C.A.), a similar motion was brought before this court in a matter involving child maintenance — although not its taxability. The court stated on p.68: ....we think it clear that the judgment of the court as entered, which gave effect to the reasons for judgment, amends the decree nisi so that it now reads as it should have read, in our opinion, when issued on 12th May 1983. The effect of the judgment was to make the order which we think the trial judge ought to have made in the first place.

There is no doubt that this court has no jurisdiction to decide appeals provided for in the Income Tax Act. We do, however, have jurisdiction to deal with questions involving the nature and timing of our own orders. We are Clearly of the view that in family matters involving maintenance or support orders, any decision of this court not in accord with the order of the lower court is “made” as of the date of the order of the lower court.

In the result, I would issue an addendum to our reasons released on November 17, 1997, to the effect that a declaratory order will issue to the effect that our order was “made” as of June 15, 1995.

Order accordingly.