Ronald E Volk v. Minister of National Revenue, [1977] CTC 2012

Roland St-Onge (orally: November 15, 1976):—The appeal of Ronald E Volk came before me on November 15, 1976 at the City of Winnipeg, Manitoba. It involves different amounts paid by the appellant to his wife for the benefit of his children in the 1972 and 1973 taxation years.

In those years the appellant first entered into a separation agreement, which was filed as Exhibit A-1, dated October 18, 1972, under which he paid $55 per week as maintenance to his wife and $50 for his children, which amounts were allowed by the respondent as deductions pursuant to paragraph 60(b) of the Income Tax Act, SC 1970-71-72, c 63.

In addition to the above-mentioned amounts, the appellant claimed as deductions the sums of $3,604.04 and $3,504.01 for his 1972 and 1973 taxation years respectively, which amounts were paid for maintaining the residence, at 58 Glencoe Avenue in Winnipeg, occupied by his wife and children.

The respondent refused to allow such deductions on the grounds that they were not paid as (1) alimony, (2) on a periodic basis, and

(3) to his wife for her maintenance and that of the children of the marriage.

The appellant testified that the written separation agreement took effect on July 19, 1972, when he signed it, and from which date he paid $105 per week to his wife as maintenance and to Mr and Mrs Dold some $150 a month as a mortgage payment.

He also testified that his wife was not present when he signed the written separation agreement and that her signature was not on the said document as of that day.

Counsel for the appellant argued that the written separation agreement was executed on July 19, 1972 because, at that time, both parties had fully agreed to all the terms of the written agreement.

According to the evidence adduced, it is self-evident that the written separation agreement was not signed by the appellant’s wife until October 18, 1972 and, consequently, was completed on that date. For this reason, the appellant is not entitled to deduct any payments made prior to October 18, 1972.

As for the mortgage payments, it is well established now, especially since the decision in Attorney-General of Canada v Weaver, [1975] CTC 646; 75 DTC 5462, that such payments can in no way whatsoever be considered as alimony payments. As a matter of fact, those mortgage payments constitute an increase in the assets of the appellant, since they are payments for a residence in which he holds an interest as a joint tenant.

I would like to refer to paragraph 60(b) which reads:

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

(b) 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 pursuant to a divorce, judicial separation 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;

In order to be able to benefit from this section, the appellant must comply strictly with this section. According to the evidence adduced, I consider that the appellant failed to bring himself within this section and, for this reason, I have to dismiss the appeal.

Appeal dismissed.