[OFFICIAL ENGLISH TRANSLATION]
1999-4221(IT)I
BETWEEN:
MARIO POISSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on July 20, 2000, at Québec, Quebec, by
the Honourable Judge Alain Tardif
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Stéphane Arcelin
JUDGMENT
The appeal from the assessment made under the Income Tax Act for the 1997 taxation year is dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 1st day of November 2000.
|
"Alain Tardif " |
J.T.C.C.
Translation certified true
on this 22rd day of September 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20001101
Docket: 1999-4221(IT)I
BETWEEN:
MARIO POISSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Tardif, J.T.C.C.
[1] This is an appeal for the 1997 taxation year.
[2] The question at issue is to determine whether, in respect of the 1997 taxation year, the amount of $5,200 paid by the appellant constituted a deduction on account of support or other allowance payable on a periodic basis.
[3] In support of the assessment that is the subject of this appeal, the Minister of National Revenue (the "Minister") assumed the following facts:
[TRANSLATION]
(a) the appellant had deducted an amount of $5,200 as support or other allowance payable on a periodic basis on the initial income tax return filed for the 1997 taxation year;
(b) the Minister had assessed the appellant's initial tax return as filed for the taxation year at issue;
(c) the appellant lived in a common-law relationship with Francine Boutin from 1984 to December 1993;
(d) the appellant and Francine Boutin had a child¾Valérie Boutin, born on July 2, 1984;
(e) the amounts paid by the appellant to Francine Boutin were not paid under an agreement or order of the Court;
(f) the amount of $5,200 paid by the appellant to Francine Boutin was paid voluntarily;
(g) consequently, the Minister disallowed the deduction of $5,200 claimed as support or other allowance payable on a periodic basis, in the year at issue.
[4] The appellant admitted all the facts assumed by the Minister with the exception of paragraphs (e) and (f).
[5] The evidence showed that, in separating by mutual consent, the appellant and his spouse had reached an agreement stipulating as follows: (Exhibit A-1)
[TRANSLATION]
Procedure for meeting the material needs of Valérie Boutin
At March 24, 1994, Mario Poisson and Francine Boutin agree that, for the time being, no alimony will be paid to Valérie Boutin.
. . .
The agreement is as follows:
Mario Poisson will support Valérie as Francine Boutin requests and in accordance with the needs communicated by Francine Boutin.
However, if a request for alimony is made in future by Francine Boutin to meet the needs of Valérie, we agree that the starting date for the alimony will become effective when a lawyer is contacted to make a claim for alimony. No retroactive payments may be sought for alimony in respect of the months preceding a future request.
In no circumstances do we waive the possibility of making a future claim for alimony.
. . .
[6] A number of years later, the dispute between the appellant and his former spouse was the subject of a judgment of the Superior Court of Quebec in which the Honourable Judge Gaétan Pelletier decided the following: (Exhibit A-2)
[TRANSLATION]
. . .
After his testimony, the parties agreed that Mr. Poisson's projected income for 1999 would be $37,791, an amount that will be the subject of an adjustment on May 15, 2000, that is, when Mr. Poisson's income tax return and the financial statements of his new company are filed.
In addition, the parties have agreed to exchange their income tax returns as well as the financial statements of Mr. Poisson's company no later than May 15 of each year.
FOR THESE REASONS, THE COURT:
GRANTS to the applicant, Francine Boutin, custody of the minor child, Valérie;
ORDERS Mario Poisson to pay Francine Boutin for the minor child, Valérie, $384.30 for support in two equal and consecutive payments of $192.15 on the 16th and the last day of each month, beginning on January 1, 1999;
ORDERS the parties to transmit to each other certified true copies of their income tax returns and, with respect to Mario Poisson, the financial statements of his company no later than May 15 of each year;
TAKES OFFICIAL NOTE of Francine Boutin's undertaking to forward the cost of tuition fees for the child Valérie to Mario Poisson;
THE WHOLE, with costs on a party and party basis.
. . .
[7] This dispute relates to and involves the period between the agreement and the Pelletier judgment. During this period, the appellant regularly and continuously paid a monthly amount of $100 to his former spouse for their child. Furthermore, the wife acknowledged that she had received the amounts.
[8] The appellant stated that the payment of these amounts resulted from long and difficult discussions and negotiations at the end of which, according to the appellant, it was agreed that it was deductible alimony. For her part, the former spouse admitted the discussions but claimed that it was not alimony but essentially a voluntary payment, neither deductible nor taxable in her hands.
[9] It emerges from the evidence that relations between the spouses were and are still very strained. The appellant claimed, both at the hearing and in his Notice of Appeal, that a written agreement had been completed but that he had misplaced it. His former spouse argued that she had never signed such a written agreement. The appellant then acknowledged that perhaps it had never been in writing but vigorously maintained that it existed as an oral agreement.
[10] The Tax Court of Canada is not a Court whose mission it is to determine support. Its sole jurisdiction in this matter is to determine how the amounts paid and payable are to be assessed and characterized under the provisions of the Income Tax Act (the "Act"). In other words, do the payments meet the requirements established by the Act and the case law to be considered as support (alimony) or periodic payments?
[11] In the case at bar, it has been shown that the appellant made the monthly payments regularly. Were these payments made voluntarily or did they result from an agreement?
[12] In light of the evidence, it does not appear that the payments were made as a result of a written agreement. There were negotiations, discussions and representations, but the appellant and his former spouse do not agree on the ultimate outcome of their discussion. The appellant would like to have this Court interpret the evidence and make a finding that confirms his appraisal of the matter.
[13] Section 56.1(1) of the Act reads as follows:
56.1(1) Support. For the purposes of paragraph 56(1)(b) and subsection 118(5), where an order or agreement, or any variation thereof, provides for the payment of an amount to a taxpayer or for the benefit of the taxpayer, children in the taxpayer's custody or both the taxpayer and those children, the amount or any part thereof
(a) when payable, is deemed to be payable to and receivable by the taxpayer; and
(b) when paid, is deemed to have been paid to and received by the taxpayer.
. . .
[14] It is easy to understand the reason for such requirements; indeed, it is easy to imagine how difficult, if not impossible, it would be for Department of National Revenue officials to make their assessments on the basis of the opinions or interpretations of the interested parties. At the same time, it would be just as difficult for the parties in question to assert their respective rights, since the support debtors could at any time, whenever they wanted to, discontinue payments and argue that they had no obligation.
[15] The requirement for an agreement or a judgment is essential and fundamental.
[16] In the case at bar, the evidence did not disclose that there was such an agreement, and therefore the appeal must be dismissed.
Signed at Ottawa, Canada, this 1st day of November 2000.
|
"Alain Tardif" |
J.T.C.C.
Translation certified true
on this 22rd day of September 2003.
Sophie Debbané, Revisor