This decision centers on the mother’s Application for child support.
The parties cohabitated from September 2019 until February 2022. They have 2 children, ages 2 and 1. The children have resided with the mother since the parties separated. The father is 42 years old and the mother is 32 years old.
The mother is employed as a teacher. The father is the sole shareholder and operator of a landscaping and snow removal company.
This matter had a motion scheduled on May 10, 2023. The father did not attend court. The court ordered that he pay temporary child support to the mother in the amount of $1,374 each month based on an imputed annual income of $92,000.
The father claims he has never earned more than $40,000 in any year. The imputation of his annual income at the May Motion was based on a letter from his corporation in 2020 in support of a housing application which stated he earned an annual income of $92,000. The father claims he lied about earning this income to obtain the housing unit and that he has never made anywhere near that amount of income.
The main issue for the court to decide in this case was the proper determination of the father’s annual income for the calculation of child support.
The court reviewed the relevant sections of the Guidelines and the jurisprudence regarding the imputation of income. To summarize, the onus is on the party seeking to impute the other’s income that they are intentionally unemployed or under-employed. All party’s have an obligation to earn what they are capable of making and to provide full financial disclosure relating to their income. Where a party fails to provide full financial disclosure, the court is entitled to draw an adverse inference and to impute income to them. The court may also impute income where it finds that a person has hidden or misrepresented relevant information respecting their income.
Specifically, self-employed party’s have the onus of clearly demonstrating the basis of their net income and providing comprehensive records of income and expenses.
The court must have regard to the payor’s capacity to earn income, which requires consideration of:
- Employment history,
- Available employment opportunities, and
- The standard of living enjoyed during the party’s relationship.
In relation to this case, the court noted that several orders were made for the father to provide full financial disclosure and he was warned about an adverse inference being drawn if he did not comply. Nevertheless, he failed to comply with these orders.
The court found the father’s non-compliance with the orders for disclosure was deliberate to obscure his income assessment. However, the court acknowledged that there must be some evidentiary basis for the income figure they chose to impute to him for support purposes.
Based on the evidence at hand, an annual income of $70,000 for the father could be the starting point. The court found it was appropriate to gross up his income, as he is declaring and paying tax on substantially less income than he is actually earning.
The court concluded that after the gross up, the father’s annual income should be imputed at $77,998. Based on this annual income, the Guidelines indicate he should pay child support for his 2 children in the amount of $1,182 each month. The court made an Order to this effect.