Date: 19990901
Docket: 98-1281-IT-I
BETWEEN:
BRENT DERGOUSOFF,
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 Regina, Saskatchewan. The parties filed an Agreed Statement of Facts which reads:
The Appellant and the Respondent for the purposes of the within appeal hereby agree as to the following facts:
1. The Appellant separated from his spouse, Armelle Antoinette Dergousoff ("spouse") on August 15, 1994;
2. Pursuant to an oral agreement between the Appellant and his spouse, the Appellant paid his spouse the sum of $3,000.00 per month for the support and maintenance of the children of the marriage commencing on September 19, 1994;
3. The payments made by the Appellant to the spouse in 1994 are not an issue in this appeal;
4. The Appellant and his spouse entered into an interim agreement (herein the "Agreement") dated June 15, 1995;
5. The Agreement states, inter alia, that the Appellant shall pay to the Wife for the support and maintenance of the children of the marriage the sum of $750.00 per month, per child commencing January 1, 1995 and continuing on the 1st day of each and every month hereafter;
6. The children of the marriage are:
Bryn Franklin Albert Dergousoff
Brielle Tegan Dergousoff
Jace Keston Frederick Dergousoff; and
Ty Zander Brent Dergousoff
7. By order of the Court of Queen's Bench, Family Law Division, Judicial Centre of Yorkton, dated August 21, 1995, the Appellant was ordered to pay to his spouse, child support upon the following terms:
"And it is further ordered and adjudged that the Petitioner (Respondent by Counter-Petition) shall pay to the Respondent (Petitioner by Counter-Petition) for the interim support and maintenance of the said children of the marriage the sum of $750.00 per month, per child, commencing January 1, 1995 and continuing on the first day of each and every month thereafter."
8. Commencing January 1, 1995 and continuing throughout the remainder of the year, the Appellant made monthly maintenance payments of $3,000.00 per month;
9. The Appellant made payments in respect of maintenance totalling $36,000.00 for the 1995 taxation year;
10. The Appellant was allowed a deduction in respect of maintenance payments made during the 1995 Taxation year in the amount of $18,000.00;
11. The appellant was allowed a deduction in respect of maintenance payments commencing with his July 1, 1995 payment;
[2] On June 15, 1995 Brent Dergousoff ("Brent") signed, and on July 12, 1995 his then wife Armelle Antoinette Dergousoff ("Armelle") signed the "Interim Agreement" described in paragraph 4, above, of which subparagraph 1.(a) stated:
1. Until the parties further agree or until an order of a Court of competent jurisdiction:
(a) The Husband shall pay to the Wife for the support and maintenance of the children of the marriage the sum of $750.00 per month, per child commencing January 1, 1995 and continuing on the 1st day of each and every month thereafter.
The order described in paragraph 7 of the Agreement Statement of Facts followed on August 21, 1995.
[3] The Appellant was not allowed to deduct the payments of $3,000 each that he made from January through June 1, 1995.
[4] The Appellant submitted a Book of Documents (Exhibit A-1) which contains correspondence, a draft agreement, the Interim Agreement, and the Court Order of August 21, 1995. This Court regards the Interim Agreement and then the Court Order as of consequence for the purposes of this appeal. There are two reasons for this:
1. The parties signed the Interim Agreement which indicated their mutual intent insofar as they could agree on a wording.
2. The Interim Agreement specifically states that it is:
1. Until the parties further agree or until an Order of a Court of competent jurisdiction ... "
That Order occurred on August 21, 1995 and by their Interim Agreement it supersedes all of the preceding agreements between them.
[5] Both the husband and the wife were represented by lawyers in the proceedings to obtain the Interim Agreement and the Court Order. This Court has no doubt that the words of both were drafted carefully with the individual knowledge of both parties as to their possible consequences one way or the other and that, as is usual in such cases, those words represented the best compromise that could be achieve by the parties and their lawyers. It is noteworthy that both the Interim Agreement and the Court Order occurred on dates that were followed closely by visits of the children to the Appellant or by payments.
[6] The words of the Court Order are that the Appellant "shall pay to the Respondent ... for the interim support and maintenance of the said children ... commencing January 1, 1995 ... etc." "Shall" refers to the future, which is after August 21. These words echo those in the Interim Agreement which was finally signed by the wife on July 12.
[7] Subsection 60.1(3) requires that "where a written agreement or order ... provides that an amount paid before that time ... is to be considered to have been paid and received thereunder ...". Thus the subsection requires that the agreement must refer to past payments which are "to be considered to have been part and received thereunder." The intent that the past payments of January 1 through June, 1995 are to be considered to have been paid and received under the Interim Agreement or the Order is not apparent on the face of either document.
[8] Rather, the reference to payments "commencing January 1, 1995 and continuing" etc. is in the nature of a recital. It is not a statement that they are considered to have been paid and received under the Order or, on July 12, 1995 under the Interim Agreement.
[9] It is well known that matrimonial disputes are among the most acrimonious of all proceedings. In many cases one party is not represented by a lawyer. It is for this reason that subsection 60.1(3) of the Income Tax Act is specific. The intent of the subsection is to make it clear to both parties on the face of the document what the tax consequences are. That clarity does not exist in this case. For this reason the appeal is dismissed.
Signed at Ottawa, Canada this 1st day of September, 1999.
J.T.C.C.