Williams v. R., [1998] 2 C.T.C. 2150

Couture C.J.T.C.:

1 This appeal was heard in Montreal on July 18, 1997. The appellant had elected to proceed under the rules which govern the Informal Procedure.

2 Mr. Déom Schulman who represents himself as a business consultant acted as agent for the appellant while Ms. Nathalie Lessard represented the respondent.

3 Once the evidence was adduced the agent for the appellant was invited to proceed with his argument which was followed by the argument of counsel for the respondent.

4 In her presentation, counsel for the respondent referred the Court to some jurisprudence in support of her contentions. It was obvious to the Court that the agent for the appellant was not familiar with that jurisprudence and in fairness for his client, the Court invited him to submit written notes in reply to the respondent's counsel.

5 The agent accepted this arrangement and the Court gave him until August 31 to submit his notes and counsel for the respondent would then have until September 30 to reply.

6 On September 5, an application by facsimile from one Nathan Schulman, a chartered accountant according to the letterhead, was received by the Court requesting that the date of August 31 be extended to September 20. This application was granted by the Court.

7 On September 16, Nathan Schulman applied for another extension to September 30 which was again granted with a corresponding extension to counsel for the respondent.

8 It is now December 4, 1997 and the Court has never heard from either Déom or Nathan Schulman since September 16 last.

9 The Court does not know why they have not lived up to their commitment and does not look kindly on this kind of treatment. Simple courtesy would require that one of them communicate with the Court and inform the Court of their intentions as to this submission. This absence of respect for the Tax Court of Canada, an institution that was placed at the disposal of Canadian taxpayers to allow them to challenge assessments issued by the Minister of National Revenue, deserves more consideration from individuals who claim some kind of professional status. There is no excuse for such behaviour in a Court of law.

10 This appeal is in respect of the appellant's 1993 taxation year. The facts are relatively simple. Mrs. Williams was married to one Michael Williams on the 6th day of July 1974. Three children were born from that marriage. On the 26th day of February 1991, the parties entered into a separation agreement which provided, inter alia, in subparagraph 4b) that over and above payment of any alimentary allowance to the plaintiff, the defendant obliges himself to pay to the plaintiff a sum of $700 per month toward the mortgage on the family residence situated at 31 Cavalier in Kirkland. This amount to be paid until the sale of the house is duly completed and executed.

11 Paragraph 5 provides:

The Defendant shall pay to the Plaintiff for the support and maintenance of the minor children, an alimentary allowance of one thousand five hundred dollars ($1,500.00) per month, payable in advance on each and every first day of the month, at the residence of Plaintiff, the whole as of signing of the present agreement;

12 This agreement was incorporated into a Judgment of Divorce by Madam Justice Hélène LeBel of the Superior Court of Quebec on June 27, 1991. In her judgment, Justice LeBel orders the parties to comply with it.

13 According to the evidence of the appellant in July 1991 she ceased to receive the $700 referred to in the subparagraph 4b). She also admitted that she received in 1993 some of the alimentary payments of $1,500 but she had to seize her husband's salary to obtain compliance with paragraph 5, that is, the alimentary allowance. As a result of the refusal by her former husband to effect the $700 payment on account of the mortgage, the appellant had to pay that amount herself.

14 Paragraph 3 of the Reply to the Notice of Appeal states:

3. On the 9th of June 1994, the Minister of National Revenue (the “Minister”) in accordance with subsection 152(2) of the Income Tax Act (the “Act”) sent the Appellant a notice of assessment for the 1993 taxation year whereby the Minister made no changes to the Appellant's declared total income.

15 Paragraphs 4 and 5 say:

4. On or about December 21st, 1995, the Appellant filed a Notice of Objection for the 1993 taxation year, requesting that the declared alimony income of $11,200 be reduced by $8,400 which represents mortgage payments of $700 per month which the Appellant's ex-spouse, Michael Williams, was obligated to pay to the Appellant but which he supposedly never did.

5. On December 4th 1996, the Minister of National Revenue (the “Minister”) confirmed that all of the declared alimony income of $11,200 for the 1993 taxation year is taxable in accordance with section 56 of the Act as originally assessed on June 9th, 1994.

16 The argument submitted by the agent of the appellant in support of the appeal is recorded verbatim in the transcript at page 36 and it reads:

Your Honour, there's several issues here, one of the first issue is was Nancy Williams acting as an agent for Michael Williams and dispersing funds on his behalf? The other major issue is did she have full discretion as to the use of the funds?

17 As to the first issue, there is no merit in law whatsoever to claim that Mrs. Williams acted as an agent for her former husband in paying the mortgage on the family house. There is no evidence written or oral establishing an agency between the parties. An individual does not become the agent of another individual by appointing herself or himself his or her agent. An agency is a contract well defined in the Civil Code of the Province of Quebec at Article 2130 under the caption “mandate”: It reads:

Mandate is a contract by which a person, the mandator, empowers another person, the mandatary, to represent him in the performance of a juridical act with a third person, and the mandatary, by his acceptance, binds himself to exercise the power.

The power and, where applicable, the writing evidencing it are called the power of attorney.

18 As to the second proposition of the agent that the appellant had discretionary power to dispose of the funds at will, I find this contention impossible to accept in the light of the wording of paragraph 5 of the Separation Agreement which reads:

The Defendant shall pay to the Plaintiff for the support and maintenance of the minor children, an alimentary allowance of one thousand five hundred dollars ($1,500.00) per month, payable in advance on each and every first day of the month, at the residence of Plaintiff, the whole as of signing of the present agreement; (emphasis added)

19 Paragraph 4b) reads:

... over and above payment of any alimentary allowance to the Plaintiff, the Defendant obliges himself and shall pay to the Plaintiff a sum of seven hundred dollars ($700.00) per month toward the mortgage of the family residence ... (emphasis added)

20 If the mortgage payment is over and above the alimentary allowance it is clear that the parties never intended that the allowance be used to pay the mortgage.

21 The Court is conscious that the appellant was not treated properly by her former husband and that she is entitled to some reimbursement from him for what she paid on his behalf, but the Tax Court of Canada is not a court of equity but a court of law and her recourse is not within the tax system but by an action in a civil court.

22 Counsel for the respondent in her argument explained the appellant's civil recourse and at page 48 of the transcript we read her comments:

And there's another fact to take into account in this present instance, is that Mrs. Williams still has recourses against her former spouse, her ex-spouse as to the amounts not paid, she could. It's true that for the moment, if she didn't get back what she paid for the house, he has an increase in his equity in the house, but she has many recourses for that, she has recourses in front of the Family Court, she has recourses in Civil Court when she sells the house for unjust enrichment, she has a lot of recourses.

23 I agree with these comments.

24 The appeal is dismissed.