Urichuk v. Minister of National Revenue, (1991) 45 F.T.R. 231 (TD)

• Judge: Cullen, J.
• Court: Federal Court (Canada)
• Case Date: April 10, 1991
• Jurisdiction: Canada (Federal)
• Citations: (1991), 45 F.T.R. 231 (TD)

Urichuk v. MNR (1991), 45 F.T.R. 231 (TD)

MLB headnote and full text

Nicholas P. Urichuk (plaintiff) v. Her Majesty The Queen (defendant)

(T-1205-84)

Indexed As: Urichuk v. Minister of National Revenue

Federal Court of Canada

Trial Division

Cullen, J.

June 5, 1991.

Summary:

A husband paid his wife $1,500/month maintenance under a 1972 separation agree­ment. A revised agreement in 1977 con­tinued the $1,500 payment and provided for "additional maintenance" of $200,000, pay­able in instalments. The husband paid the sum in three yearly instalments and deducted the amounts as maintenance under s. 60(b) of the Income Tax Act. The Minister disal­lowed the deductions and applied under s. 174 of the Act for a determination of whether the payments were deductible.

The Tax Court of Canada ruled that the payments were not maintenance and, ac­cordingly, were not deductible. The husband appealed.

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

Income Tax - Topic 2601

Deductions in computing income - Ali­mony and maintenance payments - Gen­eral - Section 60(b) of the Income Tax Act permitted deductions for periodic payments made as an allowance for main­tenance, but not periodic payments made as instalments of a lump or capital sum - The Federal Court of Canada, Trial Divi­sion, referred to factors to be considered in distinguishing the two - See paragraph 29.

Income Tax - Topic 2604

Deductions in computing income - Ali­mony and maintenance payments - "Al­lowance" - What constitutes - A husband paid his wife $1,500/month maintenance under a 1972 separation agreement - A revised agreement in 1977 continued the $1,500 payment and provided for "addi­tional maintenance" of $200,000, payable in instalments - The husband paid the sum in three yearly instalments and deducted the amounts as maintenance under s. 60(b) of the Income Tax Act - The Federal Court of Canada, Trial Division, agreed that the payments were not on account of maintenance, where the payments were yearly, not needed by the wife to maintain herself and the purpose of the $200,000 was to get the wife to halt pending divorce proceedings that the husband felt would impair his ability to conduct a crucial business deal.

Cases Noticed:

McKimmon v. Minister of National Rev­enue, [1990] 1 C.T.C. 109; 104 N.R. 195 (F.C.A.), appld. [para. 13].

Goss v. Nugent (1833), 110 E.R. 713, refd to. [para. 14].

Front and Simcoe v. Minister of National Revenue, 60 D.T.C. 1081 (Ex. Ct.), refd to. [para. 14].

Minister of National Revenue v. Import Motors Ltd., 73 D.T.C. 5530 (F.C.T.D.), refd to. [para. 14].

Klement v. Minister of National Revenue, [1987] 2 C.T.C. 27; 13 F.T.R. 61 (F.C.T.D.), refd to. [para. 26].

Minister of National Revenue v. Sills, 85 D.T.C. 5096 (F.C.A.), refd to. [para. 27].

Larivière v. Minister of National Revenue, [1989] 2 F.C. 104; 113 N.R. 153 (F.C.A.), refd to. [para. 29].

Minister of National Revenue v. Hansen, [1967] C.T.C. 440, refd to. [para. 29].

Minister of National Revenue v. Trottier, [1968] S.C.R. 728, refd to. [para. 29].

Gagnon v. Minister of National Revenue, [1986] 1 C.T.C. 410, refd to. [para. 29].

Minister of National Revenue v. Dorion, [1981] C.T.C. 136, refd to. [para. 29].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 56(1)(b) [para. 6]; sect. 60(b) [para. 25]; sect. 174(4.1) [para. 1].

Authors and Works Noticed:

Cross on Evidence (7th Ed. 1990), p. 701 [para. 14].

Sopinka and Lederman, The Law of Evi­dence in Civil Cases (1974), generally [para. 14].

Counsel:

Richard N. Billington, for the plaintiff;

James N. Shaw, for the defendant.

Solicitors of Record:

Vogel, Butler and Kazakoff, Calgary, Alberta, for the plaintiff;

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

This appeal was heard on April 10, 1991, at Calgary, Alberta, before Cullen, J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on June 5, 1991.