A-294-75
Attorney General of Canada (Applicant)
v.
James C. Weaver and Freda J. Weaver
(Respondents)
Court of Appeal, Thurlow and Urie JJ. and
MacKay D.J.—Toronto, November 4 and 5;
Ottawa, November 18, 1975.
Judicial review—Income tax—Deductions—Application to
review and set aside decision of Tax Review Board—Sum paid
by husband to wife pursuant to separation agreement as
maintenance—Whether paid as "alimony or other allow-
ance"—Income Tax Act, S.C. 1970-71-72, c. 63, ss. 56(1)(b),
60(b), 174(1)—Federal Court Act, s. 28.
Respondent husband sought to deduct $3,756.54 paid pursu
ant to a separation agreement. The Minister allowed the deduc
tion of $1,950 (the balance not being deducted by husband nor
included in wife's income), maintaining that the balance was
not paid pursuant to a decree, order or judgment as alimony or
other allowance payable on a periodic basis. The Board held
that the total sum was deductible.
Held, the Board's decision is set aside. While the Pascoe
interpretation of "other allowance" (a "limited predetermined
sum ... at the complete disposition of the recipient") may seem
narrow, it leaves scope for the application of that expression,
since "alimony" refers only to an allowance paid under a decree
for maintenance of a wife, whereas the statutory provisions are
intended to apply as well to similar allowances for maintenance
of children, whether under a decree, pursuant to a separation
agreement, or even after dissolution of the marriage. In light of
the Pascoe interpretation, none of the $1,806.54 was paid or
received as "alimony or other allowance".
Per Uric J. (dissenting in part): None of the payments, save
the mortgage payments satisfy the Pascoe test, nor the peri
odicity required by the Act. Payments were not determined to
be made at fixed, recurring intervals. None but the mortgage
have the essential element of regularity. Failure to specify in
the agreement the amounts and dates of such payments does
not preclude the application of the section to them. Nor does
the fact that mortgage payments were made directly to the
mortgage company affect their deductibility. However, as the
home is jointly owned, the benefit of repayment of principal
accrued equally, and only one-half of the principal portion is
deductible.
Pascoe v. The Queen [1976] 1 F.C. 372, followed.
JUDICIAL review.
COUNSEL:
M. J. Bonner and S. Borraccia for applicant.
P. Harris for respondents.
SOLICITORS:
Deputy Attorney General of Canada for
applicant.
MacAulay, Perry, Toronto, for respondents.
The following are the reasons for judgment
rendered in English by
THURLOW J.: This is an application under sec
tion 28 of the Federal Court Act to review and set
aside the decision of the Tax Review Board on an
application to it under section 174(1) of the
Income Tax Act. The question of which a determi
nation was sought was:
... whether the whole or any part, and, if part then what part,
of the sum of $1,806.54 was paid by James C. Weaver and
received by Freda J. Weaver in 1972, pursuant to a written
agreement, as alimony or other allowance payable on a periodic
basis for the maintenance of Freda J. Weaver, children of the
marriage, or both Freda J. Weaver and children of the mar
riage, from whom James C. Weaver was living apart and
separated pursuant to a written separation agreement and to
whom he was required to make the payments at the time the
payments were made and throughout the remainder of 1972.
The need for a decision of this question arises on
the provisions of paragraphs 56(1)(b) and 60(b) of
the Income Tax Act which read as follows:
56. (1) Without restricting the generality of section 3, there
shall be included in computing the income of a taxpayer for a
taxation year,
(b) any amount received by the taxpayer in the year, pursu
ant to a decree, order or judgment of a competent tribunal or
pursuant to a written agreement, as alimony or other allow
ance payable on a periodic basis for the maintenance of the
recipient thereof, children of the marriage, or both the
recipient and children of the marriage, if the recipient was
living apart from, and was separated pursuant to a divorce,
judicial separation or written separation agreement from, the
spouse or former spouse required to make the payment at the
time the payment was received and throughout the remain
der of the year.
60. There may be deducted in computing a taxpayer's
income for a taxation year such of the following amounts as are
applicable:
(b) an amount paid by the taxpayer in the year, pursuant to
a decree, order or judgment of a competent tribunal or
pursuant to a written agreement, as alimony or other allow
ance payable on a periodic basis for the maintenance of the
recipient thereof, children of the marriage, or both the
recipient and children of the marriage, if he was living apart
from, and was separated pursuant to a divorce, judicial
separation or written separation agreement from, his spouse
or former spouse to whom he was required to make the
payment at the time the payment was made and throughout
the remainder of the year;
These provisions are complementary and it
seems clear that under them what must be brought
into the computation of the income of a receiving
spouse is equal to what may be deducted by the
paying spouse and vice versa. What appears to be
contemplated as the foundation for their applica
tion is that the spouses must be living apart at the
time of any payment to which the statutory provi
sions are to apply and must continue to live apart
for the remainder of the taxation year. That is
what the wording at the end of each of the two
provisions appears to me to mean.
It is not in dispute that the respondents lived
apart throughout 1972 and that the amount of
$1,806.54 referred to in the question was the total
of several amounts paid by the respondent, James
C. Weaver, in the taxation year, to several credi
tors for heating, hydro, water, taxes and mortgage
payments pursuant to paragraph 3 of a separation
agreement between him and his wife, the respond
ent, Freda J. Weaver. The agreement provided
inter alia as follows:
3. The Wife shall be entitled to reside in the marital home,
owned jointly by the parties hereto, being 3714 Ellengale Drive,
Erindale Woodlands, in the Town of Mississauga, and all usual
expenses relating to such house shall be paid by the Husband,
including heating, hydro, water, necessary repairs, taxes and
mortgage payments; PROVIDED that when the youngest child
has attained the age of sixteen (16) years the parties agree that
the house shall be sold and the net proceeds, after payment of
all legal fees and real estate commission, shall be divided
equally between them.
4. The Husband shall pay to the Wife, in addition to the sum
set out in paragraph (3) above, the sum of One Hundred and
Fifty ($150.00) Dollars per month for the support of herself
and the children of the marriage; on each child attaining the
age of sixteen (16) years, or ceasing to attend a recognized
school or university, whichever occurs first, such sum will be
reduced by Twenty-Five Dollars ($25.00) with respect to each
child; the balance, in the amount of One Hundred Dollars
($100.00) per month, shall be paid to the Wife until the
youngest child attains the age of sixteen (16) years, at which
time all payments to the Wife shall cease. All payments for the
benefit of the Wife, whether made directly to her or not, made
pursuant to this agreement shall be deemed to be made in
satisfaction of a judgment for alimony as long as the marriage
subsists or in satisfaction of a judgment for maintenance in the
event that the marriage between the parties hereto is dissolved
or annulled. Subject to this agreement, when the Husband is
not in default, the Wife agrees to accept payments made with
respect to her under it in full satisfaction of and hereby releases
the Husband from all claims for alimony, interim alimony,
maintenance and support or any of them, whether arising under
statute or otherwise. The Wife covenants and agrees that this
agreement may be pleaded by the Husband as and shall be a
good defence to and estoppel against any claim whatsoever that
may be made by the Wife for alimony, interim alimony,
maintenance and support, or any of them, whether arising
under statute or otherwise.
The Tax Review Board admitted certain docu
mentary evidence and after hearing submissions by
counsel for the Minister and for both spouses
answered the question in the affirmative. On the
application to this Court under section 28 the
respondent, Freda J. Weaver was not represented
but no question was raised as to either the proprie
ty of proceedings under section 28 of the Federal
Court Act to review the Board's decision or the
right of the Attorney General of Canada to attack
the determination made by the Board. The ques
tion that arises on the review application is wheth
er the -Board erred in law in reaching its
conclusion.
In Pascoe v. The Queen' a division of this Court
considered the deductibility under section 11(1)(l)
of the former Income Tax Act of amounts paid by
a husband for medical and educational expenses of
children of the marriage. The amounts required to
pay such expenses were payable by the husband to
the wife by the combined effect of a separation
agreement and a subsequent decree in a divorce
action. Pratte J. speaking for the Court said [at
page 374]:
First, we are of opinion that the payment of those sums did
not constitute the payment of an allowance within the meaning
of section 1l(1)(1). An allowance is, in our view, a limited
predetermined sum of money paid to enable the recipient to
provide for certain kinds of expense; its amount is determined
in advance and, once paid, it is at the complete disposition of
the recipient who is not required to account for it. A payment
in satisfaction of an obligation to indemnify or reimburse
someone or to defray his or her actual expenses is not an
allowance; it is not a sum allowed to the recipient to be applied
in his or her discretion to certain kinds of expense.
While this interpretation of "other allowance"
in its context may at first sight seem narrow and
[ 1976] I . F.C. 372.
restrictive it appears to me to leave scope for the
application of that expression since "alimony", as I
understand the term, refers only to an allowance
paid under a decree for the maintenance of a wife
whereas the statutory provisions are plainly
intended to apply as well to allowances of the same
nature for the maintenance of children and, con
ceivably, of a husband, and whether under a
decree or pursuant to the terms of an agreement
for separation or even after the parties have ceased
to be husband and wife.
Moreover, the Court's interpretation appears to
me to make clear what is to be regarded as
embraced by the wording of the statute—some-
thing that cannot be said for the wording itself—
and, as parties to whom it may have application
have it within their power to make or change their
arrangements having regard to the consequences
that will flow from the statutory provisions, cer
tainty as to their application is of prime
importance.
In my opinion, the interpretation of "allowance"
adopted by the Court in the Pascoe case should be
applied and in the present case, in my view, it
leads inevitably to the conclusion that none of the
amount of $1,806.54 here in question was paid or
received "as alimony or other allowance" within
the meaning of paragraphs 56(1)(b) and 60(b) of
the Income Tax Act.
I would set aside the decision of the Tax Review
Board and refer the matter back to the Board for
determination on that basis.
* * *
The following are the reasons for judgment
rendered in English by
URIE J.: This is an application under section 28
of the Federal Court Act to review and set aside a
decision of the Tax Review Board dated June 4,
1975, determining the question set forth in an
application made by the Minister of National
Revenue pursuant to section 174 of the Income
Tax Act which question reads as follows:
... whether the whole or any part, and if part then what part,
of the sum of $1,806.54 was paid by James C. Weaver and
received by Freda J. Weaver in 1972, pursuant to a written
agreement, as alimony or other allowance payable on a periodic
basis for the maintenance of Freda J. Weaver, children of the
marriage, or both Freda J. Weaver and children of the mar
riage, from whom James C. Weaver was living apart and
separated pursuant to a written separation agreement and to
whom he was required to make the payments at the time the
payments were made throughout the remainder of 1972.
At the beginning of his argument, counsel for
the applicant was asked by the Court to explain
why he brought a section 28 application in respect
of the decision attacked rather than what would,
initially, appear to be the normal course of appeal
ing the decision of the Tax Review Board to the
Trial Division of the Federal Court.
Since we were advised that this is the first
application for review of a Tax Review Board
decision made under section 174, it would appear
desirable to carefully examine the various provi
sions conferring jurisdiction.
The following are the relevant sections of the
Income Tax Act:
173. (1) Where the Minister and a taxpayer agree in writ
ing that a question of law, fact or mixed law and fact arising
under this Act should be determined by the Federal Court, that
question shall be determined by the Court pursuant to subsec
tion 17(3) of the Federal Court Act.
174. (I) Where the Minister is of the opinion that a ques
tion of law, fact or mixed law and fact arising out of one and
the same transaction or occurrence or series of transactions or
occurrences is common to assessments in respect of two or more
taxpayers, he may apply to the Tax Review Board or the
Federal Court—Trial Division for a determination of the
question.
(3) Where the Tax Review Board or the Federal Court—
Trial Division is satisfied that a determination of the question
set forth in an application under this section will affect assess
ments in respect of two or more taxpayers who have been
served with a copy of the application and who are named in an
order of the Board or the Court, as the case may be, pursuant
to this subsection, it may
(a) if none of the taxpayers so named has appealed from
such an assessment, proceed to determine the question in
such manner as it considers appropriate, or
(b) if one or more of the taxpayers so named has or have
appealed, make such order joining a party or parties to that
or those appeals as it considers appropriate.
(4) Where a question set forth in an application under this
section is determined by the Tax Review Board or the Federal
Court—Trial Division, the determination thereof is, subject to
any appeal therefrom in accordance with the Federal Court
Act, final and conclusive for the purposes of any assessments of
tax payable by the taxpayers named by it pursuant to subsec
tion (3).
Quite clearly a decision on a reference to the
Trial Division pursuant to section 173(1) is
appealable to this Court by virtue of section 27 of
the Federal Court Act. Equally, clearly, in my
view, a determination of a question made by the
Trial Division on an application by the Minister of
National Revenue in the circumstances envisaged
by subsections (1) and (3) of section 174, may be
the subject of an appeal to this Court, because by
the terms of subsection (4) that determination is
final and conclusive "subject to any appeal there
from in accordance with the Federal Court Act."
The right to appeal granted by that Act again is
granted by section 27.
However, the only right of appeal from a deci
sion of the Tax Review Board is not provided by
the Federal Court Act but by section 172 of the
Income Tax Act, that appeal being to the Trial
Division by virtue of section 24 of the Federal
Court Act. The decision of the Tax Review Board
so appealable is one made pursuant to section 169
of the Income Tax Act reading as follows:
169. Where a taxpayer has served notice of objection to an
assessment under section 165, he may appeal to the Tax Review
Board to have the assessment vacated or varied after either
(a) the Minister has confirmed the assessment or reassessed,
or
(b) 180 days have elapsed after service of the notice of
objection and the Minister has not notified the taxpayer that
he has vacated or confirmed the assessment or reassessed;
but no appeal under this section may be instituted after the
expiration of 90 days from the day notice has been mailed to
the taxpayer under section 165 that the Minister has confirmed
the assessment or reassessed.
It will be seen that such an appeal is one from
an assessment made by the Minister. A decision of
the Tax Review Board made pursuant to section
174 is not one as the result of an appeal from an
assessment. As a matter of fact, by section 174(3),
the Board may only make the determination
applied for if none of the taxpayers affected has
appealed from their assessments.
It thus seems clear that no appeal is provided
either under the Income Tax Act or under the
Federal Court Act from a determination made by
the Tax Review Board pursuant to section 174 of
the Income Tax Act. This conclusion leads to the
anomalous result that if the Minister applies to the
Trial Division for a determination of a question of
law or of mixed law and fact under section 174,
such determination may be appealed to this Court
with the whole of the proceedings open to the
scrutiny of the Court and judgment may be given
in any of the ways permitted by section 52(b) of
the Federal Court Act. On the other hand, if he
chooses to refer the matter for determination by
the Tax Review Board, the only redress available
to a dissatisfied party or the Attorney General is
by way of a section 28 application on a question of
law only and with the limited powers of disposition
of the application provided by section 52(d) of the
Act.
In my opinion, therefore, the determination here
under review was properly brought as an applica
tion to review and set aside under section 28.
I turn now to the merits of the application. A
brief review of the facts, none of which appear to
be in dispute, is necessary to bring the problem
into focus.
The respondents are husband and wife who
entered into a separation agreement dated May
28, 1971 (hereinafter referred to as "the agree
ment"). The relevant paragraphs thereof read as
follows:
3. The Wife shall be entitled to reside in the marital home,
owned jointly by the parties hereto, being 3714 Ellengale Drive,
Erindale Woodlands, in the Town of Mississauga, and all usual
expenses relating to such house shall be paid by the Husband,
including heating, hydro, water, necessary repairs, taxes and
mortgage payments; PROVIDED that when the youngest child
has attained the age of sixteen (16) years the parties agree that
the house shall be sold and the net proceeds, after payment of
all legal fees and real estate commission, shall be divided
equally between them.
4. The Husband shall pay to the Wife in addition to the sum
set out in paragraph (3) above, the sum of One Hundred and
Fifty ($150.00) Dollars per month for the support of herself
and the children of the marriage; on each child attaining the
age of sixteen (16) years, or ceasing to attend a recognized
school or university, whichever occurs first, such sum will be
reduced by Twenty-five Dollars ($25.00) with respect to each
child; the balance, in the amount of One Hundred Dollars
($100.00) per month, shall be paid to the Wife until the
youngest child attains the age of sixteen (16) years, at which
time all payments to the Wife shall cease. All payments for the
benefit of the Wife whether made directly to her or not, made
pursuant to this agreement shall be deemed to be made in
satisfaction of a judgment for alimony as long as the marriage
subsists or in satisfaction of a judgment for maintenance in the
event that the marriage between the parties hereto is dissolved
or annulled. Subject to this agreement, when the Husband is
not in default, the Wife agrees to accept payments made with
respect to her under it in full satisfaction of and hereby releases
the Husband from all claims for alimony, interim alimony,
maintenance and support or any of them, whether arising under
statute or otherwise. The Wife covenants and agrees that this
agreement may be pleaded by the Husband as and shall be a
good defence to and estoppel against any claim whatsoever that
may be made by the Wife for alimony, interim alimony,
maintenance and support, or any of them whether arising under
statute or otherwise.
In computing his income for 1972 the respond
ent, James C. Weaver, (hereinafter referred to as
the "husband"), sought to deduct $3,756.54 paid
by him pursuant to his obligations under the
agreement as alimony. The Minister assessed each
of the respondents for income tax in respect of the
1972 taxation year on the basis that only $1,950
was properly deductible as payment of alimony by
the respondent husband, the balance of $1,806.54
being neither deductible by him nor included in
the computation of the respondent wife's income.
The permitted deduction of $1,950 was made up of
26 payments of $75 each paid pursuant to para
graph 4 of the agreement. The balance of
$1,806.54 was disallowed on the ground that it was
not an amount paid by the husband in 1972, or
received by the respondent wife, pursuant to a
decree, order or judgment of a competent tribunal
or pursuant to a written agreement, as alimony or
other allowance payable on a periodic basis for the
maintenance of the wife, the children of the mar
riage or both the wife and children of the marriage
as required by section 60(b) of the Act. The
payment of $1,950 received by the wife and
deductible in the computation of the husband's
taxable income, was included in the wife's income
by virtue of section 56(1)(b) of the Act. The above
mentioned sections read as follows:
56. (1) Without restricting the generality of section 3, there
shall be included in computing the income of a taxpayer for a
taxation year,
(b) Any amount received by the taxpayer in the year, pursu
ant to a decree, order or judgment of a competent tribunal or
pursuant to a written agreement, as alimony or other allow
ance payable on a periodic basis for the maintenance of the
recipient thereof, children of the marriage, or both the
recipient and children of the marriage, if the recipient was
living apart from, and was separated pursuant to a divorce,
judicial separation or written separation agreement from, the
spouse or former spouse required to make the payment at the
time the payment was received and throughout the remain
der of the year;
60. There may be deducted in computing a taxpayer's
income for a taxation year such of the following amounts as are
applicable:
(b) an amount paid by the taxpayer in the year, pursuant to
a decree, order or judgment of a competent tribunal or
pursuant to a written agreement, as alimony or other allow
ance payable on a periodic basis for the maintenance of the
recipient thereof, children of the marriage, or both the
recipient and children of the marriage, if he was living apart
from, and was separated pursuant to a divorce, judicial
separation or written separation agreement from, his spouse
or former spouse to whom he was required to make the
payment at the time the payment was made and throughout
the remainder of the year;
The Tax Review Board answered the question
which had been referred to it in the affirmative
and held that all the payments claimed by the
husband for alimony in 1972, namely, $3,756.54,
were deductible pursuant to section 60(b) of the
Act. It is this decision we are asked to set aside.
Another panel of this Court in the decision of
The Queen v. Pascoe [1976] 1 F.C. 372, argued
shortly before the hearing of this application, had
for consideration section 11(1)(l) of the old
Income Tax Act which is identical with section
60(b) of the present Act. Pratte J., speaking for
the Court, held [at page 374] that
An allowance is, in our view, a limited predetermined sum of
money paid to enable the recipient to provide for certain kinds
of expense; its amount is determined in advance and, once paid,
it is at the complete disposition of the recipient who is not
required to account for it. A payment in satisfaction of an
obligation to indemnify or reimburse someone or to defray his
or her actual expenses is not an allowance; it is not a sum
allowed to the recipient to be applied in his or her discretion to
certain kinds of expense.
Counsel for the applicant argued that the only
payments made by the husband which met this test
were those made pursuant to paragraph 4 of the
agreement. Of the remainder of the payments all
lacked the characteristic of an allowance in that
they were not limited, predetermined sums fixed
by the agreement. All were variable in amounts,
including the mortgage payments because they
were made up of principal, interest and taxes and
the tax portion varied from year to year.
Moreover, in his submission, with the exception
of the mortgage payments, none were payable at
fixed recurring intervals. Even in the case of the
mortgage payments he submitted that since nei
ther the amounts nor dates of payment were speci
fied in the agreement, they failed to meet the test
of periodicity required by section 60(b).
In the Pascoe case, payments made for medical
and educational expenses were disallowed as
deductions in computing the husband's income.
Pratte J. observed [at page 374] that
It is not relevant that the educational expenses may, in fact,
have been paid on a periodic basis since the periodicity required
by the statute refers to the manner in which the allowance is
payable, not to the manner in which it is in fact paid. [Empha-
sis added.]
Section 60(b) makes it clear that for amounts to
be deductible from the husband's income, they
must not only be paid as alimony or other allow
ance payable on a periodic basis as those words
have been interpreted in the Pascoe case but that
they should be "for the maintenance of the recipi
ent thereof, children of the marriage ... if he was
living apart from, and was separated pursuant to
a ... written separation agreement from his
spouse ... to whom he was required to make the
payment ...." There is no question in this case
that the husband and wife were living separate and
apart, that the payments the husband was making
were required to be made by the operation of the
agreement, and that they were for the mainte
nance of the wife and children in the sense that
they enabled them to continue to live in the former
marital home rather than in some other residence
for which either the husband or wife would be
obliged to pay. However, none of the payments,
with the exception of the mortgage payments,
meet either the test for an allowance enunciated in
the Pascoe case nor the requirement of payment
on a periodic basis. The payments were not deter-
mined by the agreement to be at fixed, recurring
intervals of time. Indeed, the agreement said noth
ing about when the payments of such expenses
must be made. None, except the mortgage pay
ments meet the requirement of regularity of pay
ment that is an essential characteristic of payment
on a periodic basis. They were, therefore, in my
view, not properly deductible in the tax year in
question.
On the other hand, the mortgage payments do
have this characteristic and I do not believe that
the failure to specify in the agreement the amounts
of such payments and the dates upon which they
were to be paid precludes the application of the
section to them. The agreement by implication
incorporates the mortgage by reference. The mort
gagee's mortgage ledger card, adduced in evi
dence, verifies that monthly payments were
required to be made on the 10th day of each
month until the maturity of the mortgage in 1992.
Clearly then the payments have the regularity of
payment of an allowance that the section
contemplates.
It was argued that even if this were so, the fact
that the tax portion of the monthly payments
varies from time to time deprives them of the
element of a "limited predetermined sum" that
Pratte J., in the Pascoe case said was a character
istic of an allowance. I cannot agree with this
submission, because the amount of that portion of
the payment was in itself fixed in advance for fixed
periods of time, probably a year. As a result, in my
view, the requirements of the section are thus met.
Two difficulties still must be dealt with before it
can be said that the mortgage payments were
properly deducted by the respondent. First, the
payments were not made to the spouse but directly
to the mortgage company. Does this affect their
deductibility? In my view, it does not. Reading
paragraphs 3 and 4 of the agreement together it is,
I think, clear that the expenses required to be paid
by the husband were in fact part of the overall
payments for the benefit of the wife and children.
The opening words of paragraph 4 "The husband
shall pay to the wife, in addition to the sum set out
in paragraph 3 above ... ", indicate that this is so.
Moreover, while by paragraph 3 it is mandatory
that the husband pay all usual expenses relating to
the house, it does not require him to make such
payments directly to the creditors to whom monies
are owing but simply to pay them. He could have
complied with his obligations under the agreement
equally well by paying the mortgage instalments to
the wife for transmission to the mortgagee. If this
is so he ought not to be deprived of his right to
deductibility of the payments or part of them
because he elected to make them directly to the
mortgagee on her behalf.
Second, the marital home was apparently owned
by the respondents as joint tenants. The proviso to
paragraph 3 of the agreement requires that the
house be sold when the youngest child attains the
age of sixteen years at which time the net proceeds
of sale will be divided equally between the
respondents. The benefit of the principal portion,
then, of each mortgage payment accrues equally to
the husband as well as the wife. In my opinion,
therefore, only one half of such principal portion of
each of the mortgage payments made by the hus
band in 1972 should be deductible in computing
his taxable income for the year. In so far as the
interest and tax portions of the payments are
concerned, since paragraph 3 of the agreement
requires the husband to pay taxes and mortgage
payments and since, as I have already indicated, I
believe these are part of the wife's allowance, the
whole of such portions paid in 1972 should be
deductible by the husband.
In the result, therefore, I would set aside the
decision of the Tax Review Board and refer the
matter back to the Board for determination on the
basis that in addition to the deduction of $1950
permitted by the assessment in respect of the
respondent husband's 1972 taxable income, there
be permitted as a deduction pursuant to section
60(b) of the Income Tax Act that portion of the
monthly instalments paid in respect of the mort
gage in the taxation year 1972 made up of one-
half of the principal portion of each such payment,
together with the interest and tax portion thereof.
* * *
The following are the reasons for judgment
rendered in English by
MACKAY D.J.: I agree with the reasons and
conclusions of my brother Thurlow.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.