Date: 20000208
Docket: 1999-3519-IT-I
BETWEEN:
JOHN H. TURNER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Vancouver, British Columbia on January 20, 2000. The Appellant was the only witness.
[2] Paragraphs 3 to 6 inclusive of the Reply to the Notice of Appeal were not refuted by the evidence. They read:
3. In computing income for the 1997 taxation year, the Appellant deducted the Amount of $28,266.36 as support payments.
4. In reassessing the Appellant for the 1997 taxation year, the Minister of National Revenue (the "Minister" allowed a deduction of $12,000.00 and disallowed an amount of $16,266.36 (the "Amount").
5. In so reassessing the Appellant, the Minister made the following assumptions of fact:
(a) the appellant was separated from Sabine Elisabeth Turner (the "Spouse") in 1988;
(b) in accordance with an Order of the Supreme Court of British Columbia dated July 8, 1988 (the "First Order"), the Appellant was required to pay to the Spouse for the maintenance of the two children of the marriage (the "Children") the amount of $350.00 per month per child until such time as each child reached the age of 19 years;
(c) the First Order also provided for a payment of $750.00 per month for the maintenance of the Spouse, which would cease upon receipt of the proceeds of the sale of the former matrimonial home;
(d) the Appellant and the Spouse were divorced in October, 1989;
(e) sometime in 1990, the Spouse and the Children began to reside in Germany;
(f) by way of an Order of the Supreme Court of British Columbia dated October 10, 1995 (the "Second Order"), the Appellant was required to pay to the Spouse the amount of $500.00 per child per month, commencing on April 1, 1995 and continuing until the Children were no longer eligible for maintenance under the Divorce Act;
(g) the Second Order also stated that any reasonable amounts paid by the Appellant by way of travel expenses and other cost in regard to the Respondent's visitations to his children in Germany or their travels to visit him are "deemed" to be expenses and cost incurred and paid by the Respondent (the Appellant) in respect of maintenance of the children of the marriage, provided that such reasonable amounts are in addition to maintenance otherwise ordered by this court and that the Respondent shall no longer pay these reasonable sums in the event that both children resume perminant (sic) residence in the jurisdiction of this court";
(h) in an Order of the Supreme Court of British Columbia dated September 2, 1997 (the "Third Order"), it stated that the Children shall reside with the Appellant, with reasonable access to the Spouse until further order of the court;
(i) as of August, 1997, the Children were residing with the Appellant;
(j) in filing his Return of Income for the 1997 taxation year, the Appellant claimed a deduction for support payments in the amount of $28,266.36 broken down as follows:
Maintenance payments 12,000.00
(1000.00 per month for 12 months)
Travel expenses 12,660.39
Legal costs 3,605.97
(k) in his 1997 Return of Income, the Appellant also claimed a deduction of $3,000.00 for child care expenses and the equivalent to married tax credit, both in respect of his oldest son, Max, who has resided with him since August, 1997;
(l) by way of Notice of Reassessment dated December 30, 1998, the Appellant was allowed a deduction of $12,000.00 in respect of maintenance payments made to the Spouse in 1997;
(m) the amounts of $12,660.39 for travel costs and $3,605.97 for legal expenses were not allowances payable on a periodic basis for the maintenance of the Children;
(n) the Spouse did not have discretion as the use of the amounts referred to in paragraph (m) above;
(o) none of the Orders of the Supreme Court of British Columbia provided that subsections 56.1(2) and 60.1(2) of the Income Tax Act (the "Act") would apply to the amounts paid for travel costs and legal expenses; and
(p) the legal fees were not incurred in respect of any of the reasons set out in paragraphs 60(o) or 60(o.1) of the Act.
B. ISSUES TO BE DECIDED
6. The issue is whether the amounts paid by the Appellant in respect of travel expenses and legal costs are deductible in computing the Appellant's income in the 1997 taxation year.
[3] The Appellant acted for himself in applying for the Second Order and drafted it himself in layman's terms. It does not refer to subsection 60.1(2) of the Income Tax Act. The payments in dispute were not periodic and the Appellant's former wife had no discretion respecting the balance of funds claimed by the Appellant which are in dispute.
[4] In his argument, the Appellant suggested that the law respecting support has varied and that, while his payments were grandfathered, the technicalities of the Income Tax Act respecting the deductions he claimed should be ignored.
[5] This cannot be done by the Court for two reasons which relate more to policy than to statutory interpretation. The first is that in the ordinary case, what affects one former spouse also affects the other in these matters. The second is that in the current matrimonial environment (or lack thereof) in Canada, these matters are policy matters which are Parliament's to decide. It is for these reasons that the Sections in question are among the most amended in the Income Tax Act.
[6] The position of Revenue Canada has been confirmed frequently by the courts in the past (see The Queen v. Armstrong (F.C.A.) 96 DTC 6315).
[7] For these reasons, the appeal is dismissed.
Signed at Ottawa, Canada this 8th day of February 2000.
"D.W. Beaubier"
J.T.C.C.