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Docket: 2003-3938(IT)I |
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BETWEEN: |
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RICHARD BIMM, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
____________________________________________________________________
Appeals heard on July 5, 2004 at Toronto, Ontario
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Before: The Honourable Justice L.M. Little |
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Appearances: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Eric Sherbert |
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JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 2000 and 2001 taxation years are allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 16th day of July 2004.
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"L.M. Little" |
Little J.
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Citation: 2004TCC503 |
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Date: 20040716 |
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Docket: 2003-3938(IT)I |
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BETWEEN: |
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RICHARD BIMM, |
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Appellant, |
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and |
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HER MAJESTY THE QUEEN, |
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Respondent. |
REASONS FOR JUDGMENT
Little J.
A. Statement of Facts:
[1] The Appellant and Patricia Michelle Salter were married on January 5, 1980.
[2] The Appellant and his wife had two children (the "Children").
[3] The marriage failed and the Appellant and Patricia Michelle Salter entered into a Separation Agreement on December 9, 1993.
[4] The Separation Agreement contains the following provision:
Richard Bimm will provide $1,000 per month for the support of the children.
[5] The Appellant and Patricia Michelle Salter were divorced pursuant to a Divorce Judgment issued on May 16, 1995.
[6] The Petition for Divorce provides for support for the Children in the amount of $1,400.00 per month. (The sum of $1,400.00 per month was to be increased annually based on the cost of living ("COL") index.)
[7] The Appellant paid his ex-wife for the benefit of the Children the amount of $1,400.00 per month (plus annual COL increases) pursuant to the Petition for Divorce plus the amount of $1,000.00 per month pursuant to the Separation Agreement. (Note: The Appellant testified that he also paid additional amounts such as private tuition fees and other expenses on behalf of the Children.)
[8] On October 4, 2000 the Appellant and his ex-spouse signed a document that was referred to as "Definition and Terms of Financial Support of Separation and Divorce Agreement" (the "Definition Agreement") (see Exhibit R-1, Tab 3).
[9] The Definition Agreement provided, in part, as follows:
a) Richard shall provide support in the amount of $1,000.00 on the first day of each month on behalf of ... the Children.
b) Richard shall provide support in the amount of $1,400.00 on the 15th day of each month on behalf of ... the Children. (The payments referred to above are hereinafter referred to as Support Payments.)
(Note: The Appellant testified that at the request of his ex-wife he has sometimes made Support Payments to third parties - i.e. to pay expenses on behalf of the Children).
[10] The Appellant testified that he has consistently made all Support Payments to his ex-spouse on behalf of the Children as set out in the Definition Agreement.
[11] When the Appellant filed his income tax returns for the 1994 - 1999 taxation years he claimed and was allowed to deduct the Support Payments that he made to his ex-spouse on behalf of the Children.
[12] When the Appellant filed his income tax returns for the 2000 and 2001 taxation years he claimed the following Support Payments:
2000 $31,407.25
2001 $30,664.00
[13] The Minister of National Revenue (the "Minister") issued several Notices of Reassessment.
[14] In the Notice of Reassessment issued on August 15, 2003 for the 2000 taxation year the Minister allowed the Appellant to deduct Support Payments of $14,033.00.
[15] In the Notice of Reassessment issued on March 6, 2003 for the 2001 taxation year the Minister did not allow the Appellant to deduct any Support Payments.
B: Issues:
[16] Is the Appellant allowed to deduct the following Support Payments?
2000 taxation year $31,407.25
2001 taxation year $30,664.00
C: Analysis:
[17] The Appellant argued that the spirit and intent of the Separation Agreement and the Divorce Judgment were to be taken together. The Appellant maintains and the records indicate that he followed the financial terms of the Separation Agreement and the Divorce Judgment in the 2000 and 2001 taxation years. The Appellant further maintains that the Definition Agreement did not provide for any changes to his financial obligations to the Children regarding Support Payments. In other words the Appellant believed that he was obliged to continue to pay the payments required by the Separation Agreement and the payments required by the Divorce Judgment.
[18] Counsel for the Respondent argued that the Definition Agreement would constitute an amendment and therefore the Support Payments that were made by the Appellant were not Support Payments within the meaning of section 60.1 of the Income Tax Act (the "Act").
[19] I have carefully considered the documents that were filed with the Court and the evidence presented to the Court and I have concluded that the Definition Agreement document dated the 4th day of October 2000 (Exhibit R-1, Tab 3) did not constitute a new or varied Separation Agreement. The Separation Agreement clearly specified that the Appellant was required to pay the amount of $1,000.00 to his ex-spouse on behalf of the Children. The Divorce Judgment clearly specified that the Appellant was required to pay $1,400.00 per month (plus annual COL increases) on behalf of the Children. The payments specified in the Definition Agreement did not change these financial obligations.
[20] It therefore follows that the Definition Agreement did not establish or create a commencement date as defined in subsection 56.1(4) of the Act.
[21] I have concluded that the Appellant is entitled to deduct Child Support Payments as follows:
2000 taxation year $31,407.25
2001 taxation year $30,664.00
[22] The appeals are allowed, without costs, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with these Reasons for Judgment.
Signed at Vancouver, British Columbia, this 16th day of July 2004.
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"L.M. Little" |
Little J.
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CITATION: |
2004TCC503 |
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COURT FILE NO.: |
2003-3938(IT)I |
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STYLE OF CAUSE: |
Richard Bimm and Her Majesty the Queen |
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PLACE OF HEARING: |
Toronto, Ontario |
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DATE OF HEARING: |
July 5, 2004 |
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REASONS FOR JUDGMENT BY: |
The Honourable Justice L.M. Little |
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DATE OF JUDGMENT: |
July 16, 2004 |
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APPEARANCES: |
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For the Appellant: |
The Appellant himself |
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Counsel for the Respondent: |
Eric Sherbert |
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COUNSEL OF RECORD: |
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For the Appellant: |
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Name: |
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Firm: |
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For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |