The taxpayer divorced her spouse and, pursuant to an "agreement for corollary relief," ratified by the Quebec Superior Court, received a total of $173,000 for the taxation years in question in weekly payments of $1000. The Minister characterized these payments as support amounts, and reassessed the taxpayer accordingly.
Favreau J found that the payments could not be construed as support amounts under the terms of the agreement. Although the section that set out the payments was entitled "Support of the female petitioner," the text of the section made it clear that the taxpayer and her spouse agreed to waive their rights to any support. Moreover, the spouse did not deduct the payments on his returns until approximately four years after the agreement was ratified, whereupon he requested an adjustment for his prior returns.
Apart from the text of the agreement, the taxpayer established that the payments were a "compensatory allowance as part of the partition of the family patrimony and the matrimonial regime" - she received the payments in exchange for her share of the business that she operated with her former spouse.