Perley C Smith v. Minister of National Revenue, [1979] CTC 3055, 79 DTC 826

John B Goetz:— The appeal of Perley C Smith was heard in Halifax, Nova scotia, on July 31, 1979, and is with respect to reassessments issued by the Department of National Revenue, November 1, 1977, relating to the appellant’s tax returns for the taxation years 1974, 1975 and 1976.

In reassessing the appellant, the respondent relied, inter alia, upon paragraph 60(b) of the Income Tax Act, SC 1970-71-72, c 63 as amended.

Facts

The appellant claimed alimony payments to his wife, Mrs Anne M J Smith, the sum of $4,750 for 1974, the sum of $5,820 for 1975, and the sum of $5,520 for 1976.

The appellant, apparently, in the early part of March 1974, had a violent argument with his wife and left the marital home to live with his son. On March 17 he had his wife attended at his son’s home and wrote to her to the following effect:

March 17, 1974.

Dear Reen,

I hereby agree to pay you $475 on the first of every month beginning April 1, 1974.

I further agree to increase this amount annually if I receive salary increases.

Accepted:	Yours truly
(Signed) Anne M J Smith	(Signed) P C Smith
Witness: (Signature)
(Signature)

It is to be noted that the term of payment by Perley Smith was signed and accepted by Anne M J Smith in the presence of witnesses.

Pursuant to this letter signed by both parties, the appellant made monthly payments to his wife for the years 1974,1975 and 1976 and the wife added to her income said payments for the years 1974 and 1975 but not for 1976 as apparently she was contemplating legal proceedings to obtain a divorce. This situation in 1976 did not come to the attention of the appellant until he received a notice of assessment in 1977. In support of the appellant’s position, his counsel cited the cases of Gordon R Beardmore and Donna E Beardmore v MNR, [1975] CTC 2030; 75 DTC 31; and Daniel Kapel v MNR, [1979] CTC 2187; 79 DTC 199.

Counsel for the Minister cited the following list of authorities, although a number of them do not seem to relate to the facts of this case at all:

Kathleen May Heal v MNR, 4 Tax ABC 228; 51 DTC 229;

Mary Cooey v MNR, 6 Tax ABC 138; 52 DTC 132;

No 67 v MNR, 7 Tax ABC 53; 52 DTC 308;

Jim Wing Yuen v MNR, 14 Tax ABC 363; 56 DTC 116;

No 345 v MNR, 15 Tax ABC 236; 56 DTC 327;

James B White Jr v MNR, 29 Tax ABC 187; 62 DTC 271;

Richard Weller v MNR, 31 Tax ABC 273; 63 DTC 256;

Edward Kostiner v MNR, 32 Tax ABC 124; 63 DTC 478;

Dr Edouard D Gagnon v MNR, 41 Tax ABC 58: 66 DTC 319;

Bennadict Vincent Griep v MNR, [1970] Tax ABC 1025; 70 DTC 1661;

John Reid v MNR, [1972] CTC 2661; 72 DTC 1540;

Thomas J Collins v MNR, [1976] CTC 2048; 76 DTC 1056;

J V R Gagné v MNR, [1976] CTC 2163; 76 DTC 1125;

Ghislaine Guèvremont and Roméo Rivet v MNR, [1978] CTC 2949; 78 DTC 1678;

Eddie D Hardy v MNR, [1978] CTC 3120; 78 DTC 1802;

Klaus L E Kaiser v MNR, [1978] CTC 2600; 78 DTC 1459;

Roland Vaillancourt v MNR, [1978] CTC 3157; 78 DTC 1829;

Daniel Kapel v MNR, [1979] CTC 2187; 79 DTC 199.

I have given serious consideration to all the cases cited by both counsel and the sole question to be resolved is whether or not the letter (Exhibit A-1) dated March 17, 1974, comes within the strict interpretation of paragraph 60(b) of the Income Tax Act which reads as follows:

60. There may be deducted in computing a taxpayer’s income for a taxation year such of the following amounts as are applicable:

(b) Alimony payments.—an amount paid 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 he was living apart from, and was separated or written separation agreement from, his spouse or former spouse to whom he was required to make the payment at the time the payment was made and throughout the remainder of the year;

As my colleague, Roland St-Onge, Esq, QC, ruled in the case of Bennadict Vincent Griep v MNR, (supra) wherein he stated at pp 1026 and 1662 respectively:

In the case of an exempting section, the appellant, in order to benefit thereby, must comply strictly with the requirements of that particular section.

Although the letter of March 17, 1974, was relied upon by the appellant as a basis upon which he could deduct such maintenance payments from his annual income for the years 1974, 1975 and 1976, and although it was also signed by his wife and witnessed, I regret that I must come to the conclusion that it does not fit into the strict wording of the Act, namely that it is “a written separation agreement’. Nowhere in the letter is there any mention of agreement to live separate and apart which I consider to be an essential ingredient in a separation agreement, this ingredient was commented upon by my colleague, M J Bonner, Esq, in the case of Kapel v MNR, (supra).

Although the appellant lived up to what he thought he should do with respect to maintenance payments for his wife, he has failed to satisfy me that he comes squarely under the exempting section, paragraph 60(b). Having failed to do so, I, with regret, dismiss the appeal.

Appeal dismissed.