The
Chairman
(orally):—This
is
an
appeal
by
J
A
Claude
Belanger
against
reassessments
of
the
Minister
of
National
Revenue
for
the
1970
and
1971
taxation
years.
The
point
at
issue
is
whether
or
not
amounts
paid
by
the
appellant
pursuant
to
a
separation
out
of
the
Superior
Court
of
Quebec,
District
of
Montreal
are
deductible
as
alimony
or
maintenance
payments
within
the
meaning
of
paragraph
11(1)
(I)
of
the
Income
Tax
Act
as
it
then
was.
The
courts
and
the
Tax
Appeal
Board
have
long
interpreted
the
section
in
question
on
a
very
narrow
basis.
Paragraph
11
(1)(l)
provides
that
the
taxpayer
must
make
such
payments:
in
the
year;
pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
separation
agreement;
and
to
his
spouse
to
whom
he
was
required
to
make
the
payments;
and
the
payments
must
be
made
on
a
periodic
basis,
before
they
are
allowable
as
deductions
in
computing
his
income.
I
agree
with
the
general
maxim
that
“all
taxing
statutes
must
be
strictly
construed”,
but
I
add,
“in
the
light
of
the
changing
social
circumstances
of
the
day”,
If
one
looks
at
the
cases
over
the
past
years,
one
finds
instances
where
moneys
that
have
been
paid
for
the
furtherance
of
the
education
of
the
children
have
not
been
allowed
as
deductions
because
they
were
not
paid
to
the
spouse.
However,
in
the
decision
of
the
Board
in
R
E
Hastie
v
MNR,
[1972]
CTC
2383;
72
DTC
1335,
subsequently
appealed
by
the
Minister
of
National
Revenue
to
the
Federal
Court
of
Canada,
and
in
the
decision
of
Mr
Justice
Walsh
([1974]
CTC
131;
74
DTC
6114),
paragraph
11(1)(l)
has,
in
my
view,
been
interpreted
in
the
manner
that
I
feel
certain
the
drafters
of
the
legislation
intended
it
to
be
interpreted,
and
has
been
interpreted
in
the
way
that
it
should
be
in
our
modern-day
society.
lt
is
true
that
in
the
Hastie
case
the
husband,
under
a
Quebec
separation,
was
required
to
pay
to
his
wife
an
alimentary
allowance
and
was
also
required
to
pay
an
additional
amount
to
her
for
mortgage
payments,
taxes
and
upkeep
in
respect
of
the
matrimonial
home.
With
the
consent
of
the
wife,
the
husband
made
the
mortgage
payments
directly
to
the
mortgagee.
These
were
disallowed
by
the
Minister
but,
on
appeal,
the
Board
allowed
them
as
deductions
and
was
upheld
in
the
Federal
Court.
The
learned
trial
judge
held
that
he
was
of
the
opinion
that
the
interpretation
given
by
the
Minister
to
paragraph
11(1)(la)
did
not
represent
the
legislators’
intention,
and
I
am
in
complete
accord
with
his
approach
to
the
subject.
He
considered
both
of
the
submissions
put
forward
by
the
Minister
as
plaintiff
before
the
Federal
Court.
The
first
part
of
the
twofold
argument
was
that
the
payments
made
to
the
mortgagee
were
not
payments
made
to
his
spouse
to
whom
he
was
required
to
make
the
payments.
The
second
argument
was
that
they
were
payments
which
the
taxpayer
was
contractually
obligated
to
make
in
any
event,
and
from
which
he
was
going
to
benefit
in
part,
since
a
portion
of
those
payments
would
increase
his
own
capital
interest
in
the
matrimonial
home.
Walsh,
J,
in
arriving
at
his
decision,
considered
paragraph
11(1)(la),
subsections
16(1)
and
(2),
and
paragraph
6(1)(da),
and
I
do
not
propose
to
deal
with
them
in
this
judgment
other
than
to
say
that
I
adopt
his
reasoning
completely.
It
seems
to
me
that
the
learned
trial
judge
has
not
taken
a
wide
or
irresponsible
view
of
payments
made
which,
as
he
says,
might
incidentally
create
some
benefit
to
the
husband
himself
but,
rather,
has
treated
the
matter
on
the
basis
that
the
payments
were
really
made
for
the
benefit
of
the
wife
and
children,
which,
in
my
view,
is
what
paragraph
11
(1)(l)
is
all
about.
The
question
s:
does
the
case
before
me
fall
within
the
ambit
of
the
Hastie
case?
Learned
counsel
for
the
respondent
says
that
it
does
not,
because,
as
I
have
said,
in
the
Hastie
case
there
was
a
direction
for
two
separate
types
of
payment
and
the
subsequent
consent
of
the
wife
for
the
mortgage
payments
to
be
made
directly.
He
says
that
in
this
case
the
wife
had
no
control
over
the
payments
in
question
and
had
nothing
to
give
up,
nor
did
she
give
anything
up,
by
any
contractual
act.
With
this
contention
I
must
disagree.
The
mere
fact
that
a
separation
was
entered
into
before
a
prothonotary
of
the
Superior
Court
of
the
Province
of
Quebec
indicates
the
consent
of
both
parties
to
the
contents
thereof,
which
provide,
inter
alia,
and
I
quote:
Plaintiff
to
pay
Defendant
an
alimentary
allowance
of
ninety
dollars
($90)
by
cash,
every
two
weeks
at
the
domicile,
plus
pay
all
other
charges
pertaining
to
the
common
domicile
which
Plaintiff
presently
pays;
should
Defendant
move
to
Trenton,
Ontario,
Plaintiff
shall
pay
Defendant
the
sum
of
three
hundred
and
fifty
dollars
($350)
per
month;
.
.
.
It
seems
perfectly
clear
to
me
that
the
alternative
given
to
the
wife
of
staying
in
the
house
with
normal
charges
paid
or
moving
to
Trenton
and
receiving
$350
per
month,
gave
her
a
right
in
the
matrimonial
domicile
that
was
valued
at
$350
per
month.
Therefore,
by
the
separation
agreement,
the
position
arrived
at
in
the
Hastie
case
in
two
steps
was
really,
by
the
passive
acquiescence
of
the
wife,
taken
in
one
step
in
the
agreement
entered
into
between
this
appellant
and
his
former
wife.
It
is
perfectly
clear
that
the
payments
that
he
made
for
the
mortgage,
the
alimony
or
maintenance
payments,
heat,
light,
telephone
and
insurance
were
all
items
in
which
the
wife
had
an
interest
and
which
necessarily
had
to
be
paid
in
order
for
the
wife
to
be
able
to
remain
in
the
matrimonial
home.
She
had
the
option,
even
after
entering
into
the
agreement,
of
leaving
the
matrimonial
home
and
having
her
allowance
increased
by
what
obviously
was
deemed
to
be
the
difference
between
$90
every
two
weeks
and
that
$90
plus
the
regular
commitments
for
running
the
matrimonial
home.
In
my
view,
as
I
have
said,
this
is
exactly
the
sort
of
thing
that
the
legislators
must
have
intended
to
enact
as
a
protection
for
the
children
of
the
marriage,
and
I
cannot
conceive
of
an
interpretation
that
would
insist
on
all
payments
being
made
to
the
wife,
a
step
which,
in
the
event
of
the
failure
of
the
wife
to
live
up
to
her
obligations,
might
result
in
the
non-payment
of
liabilities
essential
to
the
retention
of
the
matrimonial
home
and
deprive
the
children
of
the
necessities
of
life
and
manner
of
living
to
which
they
had
been
accustomed.
Surely
ensuring
the
payment
of
these
necessities
of
life
for
the
children
is
exactly
what
was
contemplated
by
the
legislators
when
enacting
this
section.
I
adopt
completely
the
reasoning
of
Mr
Justice
Walsh
in
the
Hastie
case
and
I
find
no
difficulty
whatsoever
in
finding
that
the
wife
in
this
case,
by
consenting
to
the
separation
agreement,
directed
the
payment
of
the
sums
necessary
to
take
care
of
the
items
that
I
have
mentioned
above
just
as
legalistically
and
firmly
as
was
done
in
the
Hastie
case.
I
would
therefore
allow
the
appeal
and
refer
the
matter
back
to
the
Minister
for
reassessment
accordingly,
allowing
the
appellant
to
deduct
all
sums
paid
pursuant
to
the
said
separation
agreement.
Appeal
allowed.
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