Date: 20000731
Docket: 98-438-IT-I
BETWEEN:
CLAUDE BASQUE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasonsfor Judgment
Garon, C.J.T.C.C.
[1] This is an appeal from an assessment dated June 16, 1997, issued under the Income Tax Act by the Minister of National Revenue and concerning an amount of $6,808.13. The assessment was issued against the appellant for failing to comply with a requirement to pay dated January 27, 1997, with respect to a tax liability of his ex-wife, Odette Bouchard. The requirement to pay was for a maximum amount of $9,471.99 to be paid by the appellant.
[2] Paragraph 6 of the Reply to the Notice of Appeal sets out the factual allegations on which the Minister of National Revenue relied in support of his assessment. That paragraph reads as follows:
[TRANSLATION]
6. In making assessment no. 02107 dated June 16, 1997, the Minister made, in particular, the following assumptions of fact:
(a) the appellant and Odette Bouchard (hereinafter the "ex-wife") were married;
(b) the appellant and his ex-wife separated a number of years ago and a separation agreement was made;
(c) under that agreement of January 1986, confirmed by a judgment rendered on March 25, 1986, the appellant was required inter alia to pay the expenses relating to the family home to a maximum of $105 a week;
(d) it was understood that this amount of $105 per week would be taxable in the hands of the ex-wife and deductible by the appellant;
(e) by that same agreement, the appellant undertook to:
(i) pay the taxes which his ex-wife would be required to pay on the sum of $105 a week;
(ii) look after the preparation of his ex-wife's returns of income and pay the cost thereof;
(f) contrary to his undertaking to prepare his ex-wife's returns of income, the appellant did nothing;
(g) consequently, the Minister had to proceed on the basis of information in hand provided by the ex-wife in issuing assessments on May 30, 1995 for the 1990 to 1994 taxation years;
(h) the ex-wife forwarded the statement of tax payable to the appellant, but he did not honour his undertakings;
(i) on January 27, 1997, the Minister sent the appellant a requirement to pay a maximum sum of $9,471.99;
(j) the appellant failed to act on this requirement to pay;
(k) a notice of assignment in the matter of the ex-wife's bankruptcy was filed on February 21, 1997 and Samson Bélair/Deloitte & Touche Inc. was appointed trustee of the estate of Odette Bouchard (hereinafter the "debtor");
(l) on June 16, 1997, the Minister issued an assessment against the appellant for failing to comply with the requirement to pay of January 27, 1997;
(m) that assessment applies to the tax payable on the amount of $105 a week paid to the ex-wife, that is, the debtor, for the years concerned.
[3] Through his agent, the appellant admitted the allegations appearing in subparagraphs (a), (b), (c), (d), (g),[1] (i), (k) and (l) of paragraph 6 of the Reply to the Notice of Appeal. Subparagraphs (e), (f), (h) and (j) were denied either categorically or as worded. The appellant knew nothing of subparagraph 6(m) of the Reply to the Notice of Appeal. The appellant also admitted paragraph 7 of the Reply to the Notice of Appeal, which reads as follows:
[TRANSLATION]
7. At the objections stage, the appellant claimed that an agreement signed by the appellant and his ex-wife on March 11 and 13, 1997 respectively and confirmed by a judgment dated March 26, 1997 nullified everything that had been previously provided for, including the amounts owed by the appellant to the former spouse.
[4] The appellant was the only witness in the instant case.
[5] The appellant states that he has been separated from Ms. Bouchard for more than 20 years. He referred to the corollary relief order issued in 1986 and to the fact that, as a result of that order, he was required to pay support of $162.00 a week. In addition to this amount of $162.00, he paid $105.00 a week to cover the expenses related to a house inhabited by Ms. Bouchard. These two types of payments amounted to a total of $267.00 a week.
[6] The appellant states that, in 1985, he realized that his former spouse was not including in her income the weekly support of $267.00 which he paid to her, whereas he was deducting the total of the amounts representing the weekly support of $162.00 in computing his income. Following discussions between the appellant and his ex-wife, they came to an agreement whereby he would pay what he called [TRANSLATION] "the government costs" and the related accounting expenses. Subsequently, the appellant testified, he [TRANSLATION] "regularly gave amounts of money during the year in the years that followed,[2] so that she would pay her taxes".
[7] The appellant was told that Ms. Bouchard had received a notice from Revenue Canada informing her that she owed a certain amount in income taxes. In that regard, Ms. Bouchard made the following allegation in paragraph 10 of her application to vary interim relief dated January 23, 1996:
[TRANSLATION]
10. In July 1995, the applicant Odette Bouchard had to prepare her returns of income for the years 1990 to 1994 after receiving notices to that effect from both levels of government.
According to the appellant, he had already paid the amount of tax that Ms. Bouchard was required to remit to Revenue Canada. The appellant testified that, following the troubles Ms. Bouchard had with the tax authorities, he agreed to pay her $4,900.00 to release himself from all his previous obligations toward her. However, he further stated under cross-examination that he himself had written on the cheque for $4,900.00 [TRANSLATION] "Buyback of 93 Tercel".[3] The $4,900.00 cheque in question was made out to Samson Bélair Deloitte & Touche Inc. and bears the date January 28, 1997.
[8] The appellant stated that, from 1985 to 1994, he paid Ms. Bouchard sums that amounted to $1,500.00 to $2,000.00, and sometimes more, on an annual basis so that she could pay [TRANSLATION] "her taxes". The weekly support of $162.00 which the appellant paid to Ms. Bouchard was paid by cheque, whereas the payments of $105.00 were used to pay expenses relating to electricity and heating, to insurance and to certain repairs to the house where Ms. Bouchard lived.
[9] The agreement signed by the parties on January 29, 1986 and February 17, 1986[4] (hereinafter the "agreement of February 17, 1986"), which had been reached between the appellant (described as the applicant in the agreement) and Ms. Bouchard (referred to as the respondent in that document) was filed in evidence. It was confirmed by a Superior Court judgment dated March 25, 1986. The payments the appellant had to make under the agreement appear in clauses 1, 2 and 3 thereof, which read as follows:
[TRANSLATION]
1. The applicant shall pay the respondent support of $162.00 a week, payable in advance on Thursday of each week at the respondent's home;
2. The applicant shall pay the respondent support to cover expenses relating to the family home, that is, the hydro, heating, tax and insurance bills and maintenance of the building;
The respondent may at any time require that the amounts allocated for this purpose be paid directly to her to a maximum of $105.00 a week;
Should the respondent made this election, she shall pay the items enumerated above relating to the family home;
3. The applicant undertakes to pay the additional income tax which the respondent will be required to pay as a result of the increase in support hereunder provided for;
Furthermore, the applicant shall be responsible for the preparation of the respondent's return of income and for the costs thereof.
[10] As alleged in subparagraph 6(k) of the Reply to the Notice of Appeal, Ms. Bouchard assigned her property under the Bankruptcy and Insolvency Act on February 21, 1997.
[11] The evidence also showed that a Superior Court judgment dated March 26, 1997 confirmed an agreement that the parties had signed on March 11 and 13, 1997 respectively (hereinafter the "agreement of March 13, 1997"), replacing the agreement of February 17, 1986 referred to above. The agreement of March 13, 1997 reads in part as follows:
[TRANSLATION]
. . .
THE PARTIES AGREE AS FOLLOWS:
1. The applicant shall have the exclusive right to reside in the respondent's property at 1852 Rue Bourassa, Jonquière;
2. The respondent shall pay the applicant unindexed weekly support of $162.00, payable in advance on Thursday of each week by bank transfer;
3. The respondent shall pay on the applicant's behalf, likewise as support, the hydro, heating, tax and insurance bills related to the property at 1852 Rue Bourassa in Jonquière and whose total is evaluated at $105.00 per week;
4. The parties acknowledge and specifically provide that the payments made under paragraph 3 hereof are in respect of support to provide for the applicant's needs, and that the provisions of subsections 56.1(2) and 60.1(2) of the Income Tax Act and their provincial equivalents apply to the said payments, as it is the parties' wish that those payments be deductible for the respondent and included in the applicant's income;
5. The respondent undertakes to reimburse the applicant, upon receipt of the notice of assessment, for the additional tax that she may be required to pay as a result of the respondent's payment of support valued at $105.00 a week provided for in paragraphs 3 and 4 hereof;
. . .
8. As of March 1, 1999, the respondent will no longer be required to pay support to the applicant;
. . .
11. In addition, the respondent undertakes to pay Samson Bélair, the trustee in the applicant's bankruptcy, the sum of $4,900.00 on the applicant's behalf in final payment of a 1993 Toyota motor vehicle that the applicant owns, which will enable her to keep it in her possession in future.
[12] A discharge dated March 14, 1997, which does not appear to have been forwarded to the appellant until December 19, 1997, was given to the appellant by Ms. Bouchard. That discharge reads as follows:
[TRANSLATION]
Pursuant to the settlement reached between Claude Basque and me, Odette Bouchard, which was signed on March 11 and 13, 1997, I declare that I give Claude Basque a complete and final discharge with respect to all support arrears which may be owed me as of March 14, 1997.
I also declare that I give Claude Basque a complete and final discharge with respect to all reimbursements of additional tax which Claude Basque undertook to pay me (as support) based on an increase in support which he granted me. This discharge applies to 1996 and previous years. For the years 1997 and following, the aforementioned agreement signed on March 11 and 13, 1997 continues to apply.
[13] The "Requirement to Pay" dated January 27, 1997 was filed in evidence.
[14] During the hearing, I asked counsel for the respondent to send me written submissions on certain questions relating to this case. Those submissions are set out in a letter from counsel for the respondent dated September 17, 1998, which reads as follows:
[TRANSLATION]
Please find hereunder our written submissions as requested by Judge Garon at the hearing of last August 14 in the case cited above.
The undersigned communicated with Réjean Bergeron, trustee in the bankruptcy of Odette Bouchard, Claude Basque's spouse. Mr. Bergeron works at the offices of Samson Bélair Deloitte et Touche Inc. He sent me a list of the assets and liabilities reported at the time of the assignment of Ms. Bouchard's property. Her liabilities consist mainly of tax liabilities, namely $9,500.00 owed to Revenu Québec and $9,472.00 owed to Revenue Canada. We produce the list of assets and liabilities in support hereof.
The copy of the cheque for $4,900.00 to the order of Samson Bélair Deloitte et Touche Inc., which was filed in evidence as Exhibit A-3, represents the balance of the car loan which Ms. Bouchard owed at the time her property was assigned. The payment of that amount by Mr. Basque enabled Ms. Bouchard to keep her Toyota motor vehicle. At no time was that amount used to discharge the tax liability.
The undersigned also communicated with Mr. Basque's spouse, Odette Bouchard, who stated that she had never received from Mr. Basque any cash amount that was to be used to pay the tax payable on the support. She confirmed that the amount of $4,900.00 paid to the trustee in bankruptcy was used solely for the purchase of her motor vehicle. An affidavit from Odette Bouchard attesting to these facts is also filed in support hereof.
Lastly, the undersigned reached Marc Boulanger, counsel for Odette Bouchard in her divorce proceedings. He did not know of the existence of the document filed in evidence as Exhibit A-8. That document is a discharge given to Mr. Basque for support arrears claimed by Ms. Bouchard in the context of her divorce proceedings. Mr. Boulanger was never even consulted at the time the said discharge was prepared and signed by his client.
In view of the foregoing, the respondent is justified in asking this Court to reopen the hearing. In the alternative, and failing authorization for the reopening of the hearing, the respondent asks that the appeal be dismissed.
[15] The reply of the appellant's agent to counsel for the respondent's letter is set out in a letter of September 30, 1998, which reads as follows:
[TRANSLATION]
Please find hereunder our comments on the letter of September 17, 1998 forwarded by Anne-Marie Desgens.
We have no comment to make on the second or third paragraphs of Ms. Desgens's letter since they in no way contradict Mr. Basque's testimony given at the hearing of August 14, 1998.
We object totally to the content of the fourth paragraph as it is utterly inadmissible in evidence under the legal rule which states that no testimony is admissible to contradict a valid writing.
The document filed as Exhibit A-8 was duly and freely signed by Ms. Bouchard and an attempt is now being made to violate legal rules by producing an affidavit stating the contrary.
Furthermore, the fact that Marc Boulanger, counsel for Odette Bouchard, did not know of the existence of the document filed as Exhibit A-8 in no way alters the quality of that valid writing.
Accordingly, Ms. Desgens's claims in requesting a reopening of the hearing are utterly without foundation as they are based on an affidavit that is inadmissible in evidence and which the Court must necessarily disregard, and since the other facts alleged in relation to the trustee are totally irrelevant to the instant case in which the question is still, "Did Mr. Basque owe Ms. Bouchard money when he was served with a garnishment notice?"
In our view, the evidence duly adduced before this honourable Court shows that Mr. Basque owed Ms. Bouchard nothing on the date of service of the garnishment notice since Ms. Desgens was unable to prove the contrary, and the motion for reopening of the hearing must accordingly be denied and the appeal allowed.
Analysis
General comments
[16] It can be seen from the foregoing that the assessment of June 16, 1997 is directly related to the requirement to pay of January 27, 1997.
[17] The requirement to pay of January 27, 1997 concerning the tax debtor Ms. Bouchard and addressed to the appellant reads in part as follows:
[TRANSLATION]
You are hereby required to pay to the Receiver General on account of the above-named tax debtor's liability under one or more of the Acts cited below,
(1) forthwith, the moneys otherwise and immediately payable to the tax debtor which you are liable to pay,
(2) all other moneys otherwise payable to the tax debtor which you will be, within one year, liable to pay, as and when the moneys become payable,
(3) where the moneys referred to in (1) and (2) include interest, rent, remuneration, a dividend, an annuity or other periodic payment, all such payments to be made by you to the tax debtor (at any time during or after the one-year period) until the liability is satisfied, and
. . .
but do not pay hereunder more than $9,471.99 (the maximum payable), 100% of the amount by which the total of the weekly payment exceeds $162.00.
[18] This requirement to pay was issued under subsection 224(1) of the Income Tax Act (the "Act"), which reads as follows:
Where the Minister has knowledge or suspects that a person is, or will be within one year, liable to make a payment to another person who is liable to make a payment under this Act (in this subsection and subsections (1.1) and (3) referred to as the "tax debtor"), the Minister may in writing require the person to pay forthwith, where the moneys are immediately payable, and in any other case as and when the moneys become payable, the moneys otherwise payable to the tax debtor in whole or in part to the Receiver General on account of the tax debtor's liability under this Act.
[19] Subsection 224(3) of the Act states in particular the temporal scope of a requirement to pay in respect of periodic payments issued under section 224 of the Act. Subsection 224(3) provides as follows:
Where the Minister has, under this section, required a person to pay to the Receiver General on account of a liability under this Act of a tax debtor moneys otherwise payable by the person to the tax debtor as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the requirement applies to all such payments to be made by the person to the tax debtor until the liability under this Act is satisfied and operates to require payments to the Receiver General out of each such payment of such amount as is stipulated by the Minister in the requirement.
[20] The power to make an assessment in respect of a person who has failed to comply with a requirement to pay issued under section 224 of the Income Tax Act is conferred on the Minister of National Revenue by subsection 227(10) of the Income Tax Act.
[21] The appellant did not dispute the fact that the requirement to pay was sent to the appellant on January 27, 1997, as alleged in subparagraph 6(i) of the Reply to the Notice of Appeal. Under subsection 248(7) of the Income Tax Act, this requirement, sent by priority post, is deemed to have been received on the day it was mailed, in this case on January 27, 1997.
[22] I must therefore determine whether, when the requirement to pay was communicated on January 27, 1997 and during the period ending on the day of the assessment under appeal, that is, June 16, 1997 (hereinafter the "period in issue"), the appellant was required to make a payment or payments to another person, in the instant case Ms. Bouchard, who is the tax debtor under the Income Tax Act.
[23] It was not claimed on behalf of the appellant that Ms. Bouchard was not a tax debtor within the meaning of section 224 of the Income Tax Act. Ms. Bouchard's indebtedness when the requirement to pay was communicated amounted, according to that requirement, to $9,471.99.
Agreement of February 17, 1986
[24] When the requirement to pay was communicated on January 27, 1997, the appellant was required to make certain payments to Ms. Bouchard in accordance with the agreement of February 17, 1986, confirmed, as noted above, by the Superior Court on March 25 of that year.
[25] The appellant was required to make weekly payments of $162.00 under clause 1 of the agreement of February 17, 1986, payments to a maximum of $105.00 under clause 2 of that agreement and payments of an unspecified amount under clause 3 of that same agreement.
[26] The respondent admitted in a letter to the Court dated September 24, 1999, sent in response to a request for clarification by the Court, that the assessment under appeal did not concern the amounts that the appellant was required to pay under clauses 1 and 2 of the agreement of February 17, 1986. In that regard, I refer to the following passages from that letter:
[TRANSLATION]
2) The total of the amounts which the appellant was required to pay to Odette Bouchard from the day on which the requirement to pay was communicated (January 27, 1997) until June 16, 1997, when the Minister of National Revenue made the assessment in issue.
1) Under paragraph 1 of the agreement of February 17, 1986, confirmed by the Superior Court on March 25, 1986, the appellant was required to pay Odette Bouchard $162 each week. However, that amount is not concerned by the requirement to pay since it says "do not pay hereunder more than $9,470.99 (the maximum payable), 100% of the amount by which the total of the weekly payment exceeds $162."
2) Under paragraph 2 of that same agreement of February 17, 1986, the appellant was also required to pay the expenses relating to the family home. Although it is therein stated that: "The applicant shall pay to the respondent . . .", it is plausible that the parties might have wished to say that Mr. Basque was to pay the expenses relating to the residence to third parties for Odette Bouchard's benefit since the second part of that paragraph provides that Ms. Bouchard could require that the amounts be paid directly to her.
At any event, the assessment in issue does not concern those amounts.
[27] According to the letter of September 24, 1999 from counsel for the respondent, the assessment under appeal concerns only the amounts payable by the appellant under clause 3 of the agreement of February 17, 1986, which for convenience I reproduce again:
3. The applicant undertakes to pay the additional income tax which the respondent will be required to pay as a result of the increase in support hereunder provided for;
Furthermore, the applicant shall be responsible for the preparation of the respondent's return of income and for the costs thereof.
[28] The respondent clearly confirmed in the letter just referred to that the assessment concerned only the amounts payable under the above-cited clause 3 of the agreement of February 17, 1986.
[29] That agreement, which was confirmed on March 25, 1986, was replaced by the agreement of March 13, 1997, which was confirmed by a judgment of March 26, 1997, as stated above. The agreement of February 17, 1986 thus applies to the portion of the period in issue from January 27 to March 26, 1997, whereas the agreement of March 13, 1997 is applicable from March 26 to June 16, 1997, the date of the assessment under appeal.
[30] With respect to the agreement of February 17, 1986, the question thus arises as to whether the appellant, on January 27, 1997, owed amounts that were payable to his ex-wife under clause 3 of that agreement. In other words, as of January 27, 1997, were there any arrears with respect to the payments provided for by that clause? In that regard, the appellant stated categorically that he had made the payments required under that clause. The respondent, for her part, replied as follows in the aforementioned letter of September 24, 1999:
[TRANSLATION]
On May 30, 1995, the Minister of National Revenue made assessments in respect of Odette Bouchard for her 1990, 1991, 1992, 1993 and 1994 taxation years (subparagraph 6(g) of the reply to the notice of appeal, "admitted"). Consequently, as of May 30, 1995, the appellant was required to pay Odette Bouchard the additional taxes resulting from the addition to her income of the amount of $105 a week in 1990, 1991, 1992, 1993 and 1994.
On January 27, 1997, the date on which the appellant is deemed to have received the requirement to pay, the appellant was required to pay Odette Bouchard the additional tax resulting from the addition to her income of the amount of $105 a week in 1990, 1991, 1992, 1993 and 1994. Starting on January 27, 1997, the appellant failed to comply with the requirement to pay.
[31] First of all, clause 3 of the agreement of February 17, 1986 does not state when the appellant was required to pay this additional tax. I also note that there is no assumption in the Reply to the Notice of Appeal, and in paragraph 6 thereof in particular, that the appellant owed Ms. Bouchard any amount payable under clause 3 of the agreement of February 17, 1986. In any case, the appellant's uncontradicted testimony is clear to the effect that he owed Ms. Bouchard nothing on January 27, 1997. Furthermore, it was not shown that the appellant was required to make payments to Ms. Bouchard under clause 3 of the aforementioned agreement during the two-month period in question, that is to say, from January 28 to March 26, 1997, in respect of the 1996 taxation year, for example, or any previous taxation year. Once again, there was no assumption in that regard. I conclude from the appellant's testimony that no amount was payable by the appellant in respect of that period of nearly two months.
[32] In assessing the whole of the evidence respecting the payments which the appellant might have been required to make on January 27, 1997 and afterwards, I note in particular that Ms. Bouchard was not summoned as a witness by the respondent. Her testimony could have shed some light on this question. Having regard to all the circumstances, I accept the appellant's version.
Payment of the $4,900.00 amount
[33] It was not claimed for the respondent that the assessment concerned the $4,900.00 payment which the appellant made on Ms. Bouchard's behalf by cheque dated January 28, 1997 and written to the order of Samson Bélair Deloitte & Touche Inc., the trustee in Ms. Bouchard's bankruptcy. Clause 11—cited above—of the agreement of March 13, 1997 refers to the appellant's obligation to make this $4,900.00 payment. The purpose of the payment is described in the same clause. I therefore do not have to determine whether the payment should have been made to the Government of Canada following the requirement to pay of January 27, 1997.
Agreement of March 13, 1997
[34] With regard to the period commencing on March 26, 1997 and ending the day the assessment was issued, on June 16, 1997, I turn now to the agreement of March 13, 1997, which was approved by the court on March 26, 1997.
[35] Under clause 2 of the agreement of March 13, 1997, the appellant ("the respondent" in that agreement) was required to pay Ms. Bouchard ("the applicant" in that agreement) an unindexed weekly amount of $162.00. Clause 3 of that same agreement further required the appellant to pay $105.00 on Ms. Bouchard's behalf in respect of certain expenses relating to the property inhabited by Ms. Bouchard. Clause 3 did not require the appellant to make payments directly to her.
[36] Clause 5 of the agreement of March 26, 1997 provided that the appellant was to reimburse Ms. Bouchard for the additional tax arising from the inclusion in her income of the amounts referred to in clauses 3 and 4 of that agreement, as appears from the text below:
[TRANSLATION]
The respondent undertakes to reimburse the applicant, upon receipt of the notice of assessment, for the additional tax that she may be required to pay as a result of the respondent's payment of support valued at $105.00 a week provided for in paragraphs 3 and 4 hereof.
[37] The evidence does not show whether the appellant was required to pay any amounts to Ms. Bouchard under clause 5 of the agreement at any time during the portion of the period in issue to which the agreement of March 13, 1997, confirmed by the Superior Court on March 26, 1997, applies, that is to say, from March 26 to June 16, 1997.
[38] I would note that counsel for the respondent makes no reference to the agreement of March 13, 1997 in her letter of September 24, 1999. Paragraph 6 of the Reply to the Notice of Appeal, which contains the allegations of fact or assumptions in support of the Minister of National Revenue's assessment, contains no express reference to the agreement of March 13, 1997. Subparagraph 6(m) of the Reply to the Notice of Appeal does not appear to refer even implicitly to the agreement of March 13, 1997. In paragraph 8 of that pleading, the respondent refers to the agreement of March 13, 1997, confirmed by a judgment of March 26, 1997 and the Minister of National Revenue makes the following comments on that judgment:
[TRANSLATION]
8. Upon review of that judgment, the Minister noted:
(a) that the judgment did not state that the appellant had no further payments to make, that is to say, that the amounts owed were cancelled;
(b) that that new judgment concerned provisions subsequent to the period concerned by our requirement to pay of January 27, 1997; and
(c) that, as the said judgment is not retroactive, the Minister had a duty to consider the agreement existing at the time of the requirement to pay, that is, the agreement of January 1986.
[39] The assessment under appeal thus did not include the amounts which the appellant had to pay under clause 5 of the agreement of March 13, 1997. In addition, in subparagraph 8(c) of the Reply to the Notice of Appeal, the respondent asserts that the Minister "had a duty to consider the agreement existing at the time of the requirement to pay, that is, the agreement of January 1986" described in these reasons as the agreement of February 17, 1986. The respondent appears to be suggesting that this agreement is the only one that should be considered for the purposes of the instant case. Furthermore, in light of the appellant's testimony, it was not shown on a preponderance of evidence that the appellant was required to make payments to Ms. Bouchard under the agreement of March 13, 1997 during the period from March 26 to June 16, 1997. As noted above, the Court did not have the benefit of hearing Ms. Bouchard's testimony.
Discharge
[40] The discharge of March 14, 1997 must now be considered. It should be noted in passing that the judgment confirming the agreement of March 13, 1997 was rendered after the discharge of March 14, 1997 as it is dated March 26, 1997. This discharge concerns only two subjects, which are described in the two paragraphs below:
[TRANSLATION]
Pursuant to the settlement reached between Claude Basque and me, Odette Bouchard, which was signed on March 11 and 13, 1997, I declare that I give Claude Basque a complete and final discharge with respect to all support arrears which may be owed me as of March 14, 1997.
I also declare that I give Claude Basque a complete and final discharge with respect to all reimbursements of additional tax which Claude Basque undertook to pay me (as support) based on an increase in support which he granted me for 1996 and previous years. For the years 1997 and following, the aforementioned agreement signed on March 11 and 13, 1997 continues to apply.
Signed at Jonquière,
this 14th day of March 1997
(Signed)
Odette Bouchard
[41] This discharge can have effect only as of its date, March 14, 1997. It follows that, if the appellant was required to make payments to Ms. Bouchard after January 26, 1997 and prior to March 14, 1997, he was obliged to comply with the requirement to pay of January 27, 1997 and had to make the required payments to the Government of Canada. According to its own terms, this discharge did not have retroactive effect and in any case could not take precedence over the requirement to pay. As to the period commencing on March 14, 1997 and ending on June 16, 1997, the date of the assessment here in issue, this discharge can have no effect since it expressly states that "For the years 1997 and following, the aforementioned agreement signed on March 11 and 13, 1997 continues to apply." In short, the discharge of March 14, 1997 has no effect on the requirement to pay or on the assessment in issue before this Court.
General conclusion
[42] I have concluded from the foregoing remarks that the appellant was not required to make any payments to Ms. Bouchard, the tax debtor, at any time during the period in issue, that is, from January 27 to June 16, 1997. This conclusion applies both to the payments referred to in clause 3 of the agreement of February 17, 1986 and to those required by clause 5 of the agreement of March 13, 1997. It is clear from counsel for the respondent's submissions that the assessment under appeal did not concern the payments provided for by other clauses in the agreements of February 17, 1986 and March 13, 1997. I therefore do not have to decide whether the payments which the appellant was required to make under such other clauses of the two agreements should have been taken into account when the assessment of June 16, 1997 was made.
[43] For these reasons, the appeal is allowed and the assessment of June 16, 1997 is vacated. Under subsection 12(3) of the Tax Court of Canada Rules (Informal Procedure), the appellant is entitled to such disbursements as were essential for the conduct of the appeal which he has made or is liable for.
Signed at Ottawa, Canada, this 31st day of July 2000.
"Alban Garon"
C.J.T.C.C.
Translation certified true on this 10th day of October 2001.
[OFFICIAL ENGLISH TRANSLATION]
Erich Klein, Revisor
[OFFICIAL ENGLISH TRANSLATION]
20000731
98-438(IT)I
BETWEEN:
CLAUDE BASQUE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on August 14, 1998, at Chicoutimi, Quebec, followed by a reopening of the hearing and communications by the parties during 1999, by
the Honourable Chief Judge Alban Garon
Appearances
Agent for the Appellant: Robert Dion
Counsel for the Respondent: Anne-Marie Boutin
JUDGMENT
The appeal from the assessment made under the Income Tax Act, notice of which is dated June 16, 1997, is allowed and the assessment of June 16, 1997, is vacated in accordance with the attached Reasons for Judgment. Under subsection 12(3) of the Tax Court of Canada Rules (Informal Procedure), the appellant is entitled to such disbursements as were essential for the conduct of the appeal which he has made or is liable for.
Signed at Ottawa, Canada, this 31st day of July 2000.
|
"Alban Garon" |
C.J.T.C.C.
Translation certified true
on this 10th day of October 2001.
Erich Klein, Revisor
[1] Strictly speaking, the appellant admitted this subparagraph only if the word "consequently" was omitted.
[2] The witness was referring to the years following 1985.
[3] Paragraph 11 of the agreement of March 13, 1993 contains a mention of a "1993 Toyota" vehicle.
[4] These dates are barely legible on the copy of the agreement that was filed. However, I have adopted the dates stated in one of the recitals of the agreement signed on March 11, 1997 and March 13, 1997, in which that agreement refers to the previous agreement here in question.