Cohen v. Minister of National Revenue, (1991) 40 F.T.R. 225 (TD)

• Judge: Cullen, J.
• Court: Federal Court (Canada)
• Case Date: January 09, 1991
• Jurisdiction: Canada (Federal)
• Citations: (1991), 40 F.T.R. 225 (TD)

Cohen v. MNR (1991), 40 F.T.R. 225 (TD)

MLB headnote and full text

Ernest Cohen (plaintiff) v. Her Majesty The Queen (defendant)

(Nos. T-944-88; T-945-88; T-946-88)

Indexed As: Cohen v. Minister of National Revenue

Federal Court of Canada

Trial Division

Cullen, J.

February 4, 1991.

Summary:

The Minister reassessed the taxpayer by disallowing deductions of $10,000, $10,000 and $5,000 (1981, 1982, 1983 respectively) as alimony under s. 60(b) of the Income Tax Act. The taxpayer appealed.

The Federal Court of Canada, Trial Division, dismissed the appeal.

Estoppel - Topic 1004

By conduct - Against Crown - The Minister allowed the taxpayer's deductions of certain payments to his ex-wife as alimony under s. 60(b) of the Income Tax Act - The wife refused to include the payments as income - The Minister reassessed the husband, disallowing the deductions - The husband submitted that the Crown was estopped from now denying the deduction previously allowed - The Federal Court of Canada, Trial Division, stated that "the Minister or other subordinate of the Crown cannot by any conduct or representation bar the Crown from enforcing a statute where there had previously been a failure to apply the law. Estoppel cannot override the law of the land" - See paragraph 35.

Estoppel - Topic 1387

By conduct - Circumstances where doctrine not applicable - To limit exercise of statutory power - [See Estoppel - Topic 1004].

Income Tax - Topic 2603

Deductions in computing income - Alimony and maintenance payments - Lump sum maintenance in instalments - Section 60(b) of the Income Tax Act permitted a deduction for alimony "paid on a periodic basis" for the maintenance of the recipient - The Federal Court of Canada, Trial Division, stated that a lump sum maintenance payment, paid in instalments, could constitute periodic payments even where the instalments were not equal.

Income Tax - Topic 2603

Deductions in computing income - Alimony and maintenance payments - Lump sum maintenance in instalments - In a divorce decree the husband agreed to pay $1,500/month maintenance plus $25,000 as maintenance in three yearly instalments - The Federal Court of Canada, Trial Division, held that the payments were not deductible under s. 60(b) of the Income Tax Act as alimony "paid on a periodic basis" for the maintenance of the recipient - The obligation to pay instalments survived the parties, the finality clause acknowledged a capital payment in lieu of all future marital rights and the instalments were not needed for the wife to reestablish herself - The provisions of the agreement were inconsistent with the nature of a periodic allowance for the needs of the recipient spouse.

Income Tax - Topic 7865

Returns, assessments and appeals - Objections - Bars - Estoppel - [See Estoppel - Topic 1004].

Cases Noticed:

Klement v. Minister of National Revenue, [1987] 2 C.T.C. 27; 13 F.T.R. 61 (F.C.T.D.), consd. [para. 23].

Lariviere v. Minister of National Revenue (1987), 8 F.T.R. 14; 86 D.T.C. 6549 (F.C.T.D.), refd to. [para. 25].

Gagné v. Minister of National Revenue, 82 D.T.C. 1672 (T.R.B.), refd to. [para. 25].

Pisony v. Minister of National Revenue, 82 D.T.C. 1023, refd to. [para. 25].

Veliotis v. Minister of National Revenue, 74 D.T.C. 6190 (F.C.T.D.), refd to. [para. 25].

Harel v. Province of Québec, [1978] 1 S.C.R. 851; 18 N.R. 91, refd to. [para. 25].

Minister of National Revenue v. Hansen, [1967] C.T.C. 440 (Ex. Ct.), refd to. [para. 26].

No. 427 v. Minister of National Revenue, 57 D.T.C. 291 (T.A.B.), refd to. [para. 27].

McKimmon v. Minister of National Revenue, 88 D.T.C. 6296 (F.C.T.D.), refd to. [para. 28].

Minister of National Revenue v. Trottier, [1967] C.T.C. 28, refd to. [para. 29].

Minister of National Revenue v. Dorion, [1981] C.T.C. 136 (F.C.T.D.), refd to. [para. 31].

Leclair v. Minister of National Revenue, [1982] C.T.C. 2715 (T.R.B.), refd to. [para. 32].

Gibbon v. Minister of National Revenue, 77 D.T.C. 5193, refd to. [para. 35].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 56(1)(b) [para. 4]; sect. 60(b) [para. 22].

Income Tax Act, Interpretation Bulletin IT-118R2 [para. 25].

Interpretation Bulletins - see Income Tax Act.

Counsel:

Peter Sim, for the plaintiff;

Don Gibson, for the defendant.

Solicitors of Record:

McJannet, Weinberg, Rich, Winnipeg, Manitoba, for the plaintiff;

John C. Tait, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant.

This appeal was heard on January 9, 1991, at Winnipeg, Manitoba, before Cullen, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on February 4, 1991.