Date: 20011116

Docket: 2001-2745-IT-I

BETWEEN:

ROBERT BIGGS,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasonsfor Judgment

Beaubier, J.T.C.C.

[1]            This appeal pursuant to the Informal Procedure was heard at Victoria, British Columbia, on November 9, 2001. The Appellant was the only witness.

[2]            Paragraphs 2 to 5 inclusive of the Reply to the Notice of Appeal read:

2.              In computing taxes payable for the 1999 taxation years the Appellant claimed the Equivalent to Spouse Tax Credit of $5,718.00 (the "Credit").

3.              The Minister of National Revenue (the "Minister") reassessed the Appellant to disallow the Credit.

4.              In so reassessing the Appellant for the 1999 taxation year, the Minister relied on the following assumptions of fact:

a)              the Appellant and Gisele Marie Brideau (the "Ex-Spouse") were divorced effective May, 1994;

b)             in accordance with an Order of the Supreme Court of B.C. dated April 26, 1994 (the "Order"), the Appellant and the Ex-Spouse were given joint custody and guardianship of the three children of the marriage (the "Children"), Matthew Biggs ("Matthew"), Julian Biggs ("Julian") and Michael Biggs ("Michael"), with the primary residence for the Children being with the Ex-Spouse;

c)              the Order also required that the Appellant pay to the Ex-Spouse the sum of $250.00 per month per child for the support of Matthew and Julian effective April 1, 1994 and on the first of each and every month thereafter so long as they remain children of the marriage or until further Order of the Court;

d)             the Order further provided that the Appellant pay to the Ex-Spouse $100.00 per month for the support of Michael effective April 1, 1994 and continuing thereafter for so long as Michael resides with the Ex-Spouse on a full time basis or until further Order of the Court;

e)              on or about June 24, 1997, Matthew began to live with the Appellant;

f)              as of June, 1997, the Appellant no longer made payments to the Ex-Spouse for the support of Matthew;

g)             there has been no Court Order subsequent to the Order; and

h)             the Appellant and the Ex-Spouse have not entered into any written agreement which would supercede the Order.

B.             ISSUES TO BE DECIDED

5.              The issue is whether the Appellant is entitled to the Credit in the 1999 taxation year.

[3]            Assumptions 4 a) to g) inclusive were not refuted.

[4]            Respecting assumption 4 h), the Appellant filed Exhibit A-1, an Agreement which he and his ex-spouse signed in 2001. It reads:

AGREEMENT

This Agreement is dated for reference the 30^th day of June, 1997 (the "Reference Date")

BETWEEN:

ROBERT JOHN BIGGS

AND:

GISELE MARIE BRIDEAU

WHEREAS the above named parties wish to enter into this agreement to supersede the Order of the Supreme Court of B.C. dated April 26, 1994 (the "Order"):

The Order is superseded to reflect that effective from July 1, 1997, there will be no requirement for child support payments from

ROBERT JOHN BIGGS to GISELE MARIE BRIDEAU in respect of MATTHEW ROBERT BIGGS, born July 14, 1983.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the Reference Date.

SIGNED, SEALED AND DELIVERED               )

in the presence of                                                                 )

                                                                                                )

_____"signature"____________________                )

Name                                                                                       )

                                                                                                )

"Rob Lervold"______________________ )

Address                                                                  )

                                                                                                )"signature"

"1295 Kingfisher Rd"___________________)Robert John Biggs

                                                                                                )

____"Banker"_________________________)

Occupation                                                                            )

"stamp"

SIGNED, SEALED AND DELIVERED               )

in the presence of                                                                 )

                                                                                                )

_____"signature"____________________                )

Name                                                                                       )

                                                                                                )

"Rob Lervold"______________________ )

Address                                                                  )

                                                                                                )"signature"

"1295 Kingfisher Rd"___________________)Gisele Marie Brideau

                                                                                                )

____"Banker"_________________________)

Occupation                                                                            )

"stamp"                                  "Tax Court of Canada stamp"

[5]            The Appellant and his former spouse agreed orally to the matters described in assumptions 4 e) to g) inclusive because, like most people in their situations, they could no longer afford lawyers to document their post-marital arrangements. The divorce and its legal manifestations left them without funds. However, upon this reassessment they learned that a written agreement was necessary under the Income Tax Act to evidence their rearrangements and they signed it in 2001, retroactively.

[6]            In 1999 the Appellant was not married, was supporting Michael, his child under 18 who resided with, and was wholly dependant for support on the Appellant. The Appellant and his ex-wife had orally agreed that the Court Order for support of Michael would not apply and that the Appellant would have custody and support Michael in his home and the Appellant did this.

[7]            In subsection 56.1(4) "support amount" is described as an amount "receivable under an order of a competent tribunal or under a written agreement". Subsection 56.1(4) does not state that a written agreement cannot be retroactive respecting what happened in this case. Indeed, in this case Exhibit A-1, the agreement, is not retroactive; rather it is written evidence of what the parties in fact agreed to and did on a timely basis for the period in question. More important, in assumption 4 d), the Respondent pleaded that the Order respecting support for Michael only continued in effect "so long as Michael resides with the Ex-Spouse on a full time basis ...". Thus, the obligation to pay support pursuant to the Order only existed as long as Michael resided with the Appellant's ex-spouse. Exhibit A-1 confirms the fact that after July 1, 1997, Michael resided with the Appellant and that support payments for Michael ceased at that time. Therefore the obligation to pay support pursuant to the Order ceased on July 1, 1997. During the 1999 taxation year no support amount was payable and all of the other requirements under s. 118 were met. Therefore the Appellant was entitled to the equivalent-to-spouse credit.

[8]            The appeal is allowed and this matter is referred to the Minister of National Revenue for reconsideration and reassessment accordingly.

[9]            The Appellant is awarded costs of $100.00 to reimburse him for disbursements incurred in carrying out this appeal.

Signed at Ottawa, Canada, this 16^th day of November, 2001.

"D. W. Beaubier"

J.T.C.C.

COURT FILE NO.:                                                 2001-2745(IT)I

STYLE OF CAUSE:                                               Robert Biggs v. The Queen

PLACE OF HEARING:                                         Victoria, British Columbia

DATE OF HEARING:                                           November 9, 2001

REASONS FOR JUDGMENT BY:                      The Honourable Judge D. W. Beaubier

DATE OF JUDGMENT:                                       November 16, 2001

APPEARANCES:

Agent for the Appellant:                     Ron Hampton       

Counsel for the Respondent:              Michael Taylor

COUNSEL OF RECORD:

For the Appellant:                

Name:                               

Firm:                 

For the Respondent:                             Morris Rosenberg

                                                                Deputy Attorney General of Canada

                                                                                Ottawa, Canada

2001-2745(IT)I

BETWEEN:

ROBERT BIGGS,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on November 9, 2001 at Victoria, British Columbia by

the Honourable Judge D. W. Beaubier

Appearances

Agent for the Appellant:                       Ron Hampton

Counsel for the Respondent:                Michael Taylor

JUDGMENT

          The appeal from the reassessment made under the Income Tax Act for the 1999 taxation year is allowed, and the matter is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.

          The Appellant is awarded costs fixed in the amount of $100.00 to reimburse him for disbursements.

          Signed at Ottawa, Canada, this 16^th day of November, 2001.

"D. W. Beaubier"

J.T.C.C.