Chadwick v. Canada, 2013 FCA 181 (2013)

Parts:Chadwick v. Canada
Reporting Judge:BLAIS C.J.
Docket Number:A-408-12
 
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Federal Court of Appeal - Chadwick v. Canada [Anonymoused]

Source: http://decisions.fca-caf.gc.ca/en/2013/2013fca181/2013fca181.html

Date: 20130710

Docket: A-408-12

Citation: 2013 FCA 181

CORAM: BLAIS C.J.

MAINVILLE J.A.

NEAR J.A.

BETWEEN:

H arvey C hadwick

Appellant and

HER MAJESTY THE QUEEN

Respondent

Heard at Regina, Saskatchewan, on June 27, 2013.

Judgment delivered at Ottawa, Ontario, on July 10, 2013.

REASONS FOR JUDGMENT BY: NEAR J.A.

CONCURRED IN BY: BLAIS C.J.

MAINVILLE J.A.

Date: 20130710

Docket: A-408-12

Citation: 2013 FCA 181

CORAM: BLAIS C.J.

MAINVILLE J.A.

NEAR J.A.

BETWEEN:

H arvey C hadwick

Appellant and

HER MAJESTY THE QUEEN

Respondent

REASONS FOR JUDGMENT

NEAR J.A.

[1] The appellant (“the taxpayer”) appeals from the August 31, 2012 judgment of the Tax Court, in which the judge dismissed his appeals from reassessments made under the Income Tax Act , R.S.C., 1985, c. 1 (5 th Supp.) (“the ITA”) for the 2008 and 2009 taxation years. In his reasons, the judge determined that the taxpayer’s child support payments were not deductible from his income for the relevant years.

[2] The ITA was amended in 1997 to neutralize the tax treatment of child support payments. Prior to the amendments, child support payments were generally includable in the income of the recipient and deductible from the income of the payer. Following the amendments, such payments are neither includable in nor deductible from the income of either party. The ITA includes transitional rules to cover situations such as that before us.

[3] The taxpayer and his ex-spouse entered into an inter-spousal contract (“the Agreement”) in September 1996, specifying that the taxpayer would pay $450 per month to his ex-spouse in support of their two children. The couple petitioned for divorce in 1997 and, in uncontested and on-consent proceedings in 1998, a divorce judgment (“the Divorce Judgment”) was issued that incorporated, for the most part, the terms of the Agreement, including the monthly child support payment amount of $450. The Agreement was thus entered into prior to the amendments, and the Divorce Judgment was issued following the amendments.

[4] While a child support amount payable under an agreement or order made prior to May 1997 is generally subject to the old regime, there are four exceptions to this rule: Holbrook v. Canada , 2007 FCA 145 at paragraph 8; subsection 56.1(4) of the ITA (definition of “commencement day”). As set out in Holbrook...

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