Date: 20010628
Docket: 2000-2265-IT-I
BETWEEN:
JAMES K. SCOTT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hershfield, J.T.C.C.
Facts
[1] This is an appeal under the Informal Procedure of a reassessment disallowing the deduction in 1997 of support payments made in that year by the Appellant to Catherine Anne Stenger Mass.
[2] The facts of this case are not in dispute. Counsel for the Respondent agreed to the following facts attested to by the Appellant:
(a) the Appellant is the natural father of Jesse Angus Scott Mass. Ms. Mass is the mother;
(b) the Appellant was, in 1990, when Jesse was born, cohabiting with Ms. Mass in a conjugal relationship. Such cohabitation was of a nature and for a period that would, if the extended meaning of "spouse" set out in subsection 252(4) of the Income Tax Act (the "Act") applied, deem Ms. Mass to be the Appellant's spouse at that time and for a further period ending in 1992 when the cohabitation ceased;
(c) pursuant to a written custody agreement entered into between Ms. Mass and the Appellant, the Appellant agreed to pay, commencing May 1992, maintenance and support to Ms. Mass for the maintenance and support of herself and Jesse;
(d) the support payments have been made since May 1992 and continued with the Appellant's willing acceptance of his moral and legal obligations to provide support. Although hearsay, evidence was adduced without objection (except as to relevance) that Ms. Mass had reported support payments in her income tax return in each year she received such payments including 1997;
(e) the 1997 support payments, in the amount of $7,900.00, were paid to Ms. Mass pursuant to the written custody agreement;
(f) all the requirements of the Act for the deduction of the said $7,900.00 payment were met except the requirement in issue; namely, whether in 1997, Ms. Mass was the former spouse of the Appellant for the purposes of paragraph 60(b) of the Act. If she was, the Respondent agrees that the deduction is permitted and the appeal should be allowed.
[3] The requirement that Ms. Mass be the former spouse of the Appellant is set out in paragraph 60(b) of the Act and in the definition of "support amount" in subsection 56.1(4). Paragraph 60(b) prescribes a formula setting out the amount deductible. It includes a "support amount" and reduces the inclusion in circumstances not applicable here. Accordingly, the payment would be deductible under paragraph 60(b) if it is a "support amount" as defined in subsection 56.1(4).
[4] The definition of "support amount" in subsection 56.1(4) is as follows:
"support amount" means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and
(a) the recipient is the spouse of former spouse of the payer, the recipient and payer are living separate and apart because of the breakdown of their marriage and the amount is receivable under an order of a competent tribunal or under a written agreement; or
(b) the payer is a natural parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province.
[5] Paragraph (b) of the definition of "support amount" would permit the deduction claimed if the Appellant had an order. Since the Appellant does not have an order, the payment must fall within paragraph (a) of the definition of "support amount" to be deductible. As stated, the requirement of paragraph (a) in issue is whether the recipient Ms. Mass is the former spouse of the payor, the Appellant. That the Appellant was not legally married to Ms. Mass takes me to examine the extended definition of spouse found in the Act.
[6] The extended definition of "spouse" is found in subsection 252(4) of the Act as it read in 1997. That subsection reads as follows:
(a) words referring to a spouse at any time (emphasis added) of a taxpayer include the person of the opposite sex who cohabits at that time with the taxpayer in a conjugal relationship and
(i) has so cohabited with the taxpayer throughout a 12-month period ending before that time, or
(ii) is a parent of a child of whom the taxpayer is a parent (otherwise than because of the application of subparagraph (2)(a)(iii))
[7] This subsection was added in 1994 applicable after 1992. That is, under the transitional rule, this expanded meaning of "spouse" is to be read as being part of the Act effective January 1, 1993. Since the Act is being read in this case in respect to the 1997 year (the payment year), the expanded definition of "spouse" unquestionably applies. Since the expanded definition of "spouse" has application, it must be applied in accordance with its terms, which terms require the examination of the subject relationship (to determine if it is a conjugal relationship) at a time (that is "any time" which includes a time before January 1) that the relationship needs to be determined, i.e. the time when the reference to spouse is being examined under the Act. Since the context here is determining a "former" relationship (a former spouse), the time for determining the relationship will almost invariably be before the year in question. For example, a conjugal cohabitation commencing in 1995 ending in 1996 will be recognized in 1997 as giving rise to former spouses.[1] That is, in the context of determining whether a person is a former spouse, the expanded definition has to look back. The expanded definition does not put a limit on how far to look back. To the contrary, it stipulates, in effect, "any time" as the available look back time. The expanded definition applies at "any time" the relationship needs to be examined including relationships that started, or started and ended, prior to 1993. If the expanded definition were to apply otherwise the express language of the definition would have provided dates before and after which the relationship can be examined or not. If one wants a legislative model exemplifying such temporal applications one only has to look at another definition in subsection 56.1(4), namely, the definition of "commencement day". The introduction of that definition is effective after 1996 but the Act does not then read as if the definition does not depend on other relevant times. One must determine at any time after 1996 whether there is a commencement date but whether or not a commencement date in fact exists depends on events happening before April 1997 or after May 1997 as expressly set out in the definition of "commencement day". If Parliament had intended that common law relationships before 1993 could not be recognized, the cohabitation period referred to in subsection 252(4) could similarly have referenced relevant dates as to when cohabitation had to commence or end. The effective date alone being 1993, does not do that in my view, at least in this case where the express language of the amended provision invites a construction that permits (dictates) examining a relationship "at any time" which, as stated, clearly includes a time before the effective date of the amendment. I see no other interpretative approach in this case.[2]
[8] It is noteworthy that unlike subsection 252(3), subsection 252(4) makes no reference to the phrase "former spouse". Arguably, this omission in subsection 252(4), supports the view that one could have a common law spouse recognized without recognition of there being a former spouse after the common law relationship has ended. In a literal sense subsection 252(4) only defines "spouse". It says when a party shall for the purposes of the Act be treated as a spouse. It does not go on to say that a person regarded as a spouse for the purposes of the Act should be regarded as a former spouse for the purposes of the Act when the extended definition of spouse no longer applies to the particular relationship. On the other hand, "former spouse" is not defined in the Act except in subsection 252(3) in the context of void or voidable marriages. As such, the phrase "former spouse" should have its normal meaning where it is used in other contexts and that normal meaning would include a person who had once been a spouse, actual or by the extended definition, but who is no longer a spouse. In my view, the inference of subsection 252(3) is not sufficient to detract from such a construction of the term "former spouse".
[9] Accordingly, I find the subject payments were paid to a former spouse as required by paragraph 60(b) and the appeal is thereby allowed.
Signed at Ottawa, Canada, this 28th day of June 2001.
"J.E. Hershfield"
J.T.C.C.
COURT FILE NO.: 2000-2265(IT)I
STYLE OF CAUSE: James K. Scott and
Her Majesty the Queen
PLACE OF HEARING: Winnipeg, Manitoba
DATE OF HEARING: April 3, 2001
REASONS FOR JUDGMENT BY: The Honourable Judge J.E. Hershfield
DATE OF JUDGMENT: June 28, 2001
APPEARANCES:
For the Appellant: The Appellant himself
For the Respondent: Cary Clark (student at law)
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2000-2265(IT)I
BETWEEN:
JAMES K. SCOTT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on April 3, 2001 at Winnipeg, Manitoba, by
the Honourable Judge J.E. Hershfield
Appearances
For the Appellant: The Appellant himself
For the Respondent: Cary Clark (student at law)
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1997 taxation year is allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment for the reasons set out in the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 28th day of June 2001.
|
"J.E. Hershfield" |
J.T.C.C.
[1] The only other way to read the definition is to attach the phrase "at any time" to the time that the (former) spouse is being referred to in the Act, i.e. 1997 in this case. If that is how to read the definition, it would be impossible for it to recognize any common law relationship that commenced and ended before the reference year even if the relationship commenced and ended after 1992.