This decision is interesting for family law lawyers. Under a separation agreement Mr. Berty paid “Fifty percent (50%), net of income tax, of any bonus income received by [him] … to the wife as lump sum child and spousal support”. Bedard J. said the amount was not deductible because it was not periodic and because it included an indeterminate portion for child support. He said:
“[21] Since the evidence reveals that there is no guarantee that the bonus will be paid in any given year (although, as per the appellant’s submissions, the risk seems fairly remote), I am of the opinion that the support payment of $11,739 made in relation to the appellant’s bonus does not meet the definition of ‘periodic’…”
And on the second ground, he reasoned that under “the Agreement, there is no allocation in relation to support. In the absence of allocation of amounts between child support and spousal support, the entire amount is treated as child support in accordance with the definition of ‘child support’ in the [Income Tax Act.” [Para. 23]