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BACKGROUND
In this Ontario Court of Appeal decision, the Appellant Father appealed two orders made by the trial judge. The first order was made at the beginning of trial and granted the Respondent Mother’s motion to strike the father’s pleadings. The second order appealed was the order made following the uncontested trial the next day which required the father to pay table child support on an imputed income of $80,000 and an equalization payment of approximately $507,000. The trial judge’s decision was partially informed by facts regarding the father’s interest in a Dubai-based company called Ishan General Trading LLC which he owned and operated.
ISSUES
The father made three arguments which became the issues on appeal:
- Did the trial judge err in law and deny the father procedural fairness by striking his pleadings?
- Did the trial judge err in the net family property equalization by overvaluing the father’s interest in Ishan?
- Did the trial judge err in imputing income to the father for the purpose of child support?
The father asserted that the trial judge made errors on all three issues.
ANALYSIS
Did the trial judge err in law and deny the father procedural fairness by striking his pleadings?
The father claimed that he was not served with the mother’s motion to strike his pleadings even though he attended court to oppose the motion. He further argued that the trial judge should have allowed him more time to comply with his disclosure obligations.
The Court of Appeal disagreed. Upon the court’s review of the transcript from the hearing, the court concluded that the trial judge carefully addressed the issue of service and was satisfied that the father had been served with the motion materials, contrary to his argument.
The Court of Appeal also found that the father had ample notice that he was at risk of having his pleadings struck. In fact, he and his counsel attended a Settlement Conference whereby the conference judge clearly outlined what disclosure was expected of the father and specifically granted leave to the mother to bring a motion to strike the father’s pleadings if he failed to comply.
Further, at the time the mother’s motion to strike pleadings was brought before the court, the family law proceedings for this matter had been outstanding for over 9 years as the father failed to comply with several orders and statutory obligations. Although striking pleadings is a remedy of last resort, the court found that no other remedy would have sufficed.
As such, there was no procedural unfairness.
Did the trial judge err in the net family property equalization by overvaluing the father’s interest in Ishan?
The father argued that the trial judge incorrectly disregarded the 2015 financial statement that he tried to bring to the court’s attention during the motion and was part of the trial record.
Even though he eventually admitted his interest in Ishan, because there were several court orders and specific warnings given to the father about complying with disclosure obligations, the trial judge was justified in disregarding the financial statement. Because the father’s pleadings were stuck, the trial judge favoured the mother’s proposed valuation of Ishan to the father’s selective disclosure of one document (the 2015 financial statement) that Ishan had no value on the valuation date.
Thus, the trial judge did not err in his valuation of Ishan and subsequent determination of the equalization payment.
Did the trial judge err in imputing income to the father for the purpose of child support?
The father argues that there was “no evidence” that he earned any income beyond the amount reflected in his income tax notices of assessment.
The Court of Appeal disagreed. Although section 16 of the Child Support Guidelines outlines that the initial step for calculating income is based on line 150 of the payor’s income, sections 17 to 19 make it clear that if line 150 does not accurately reflect the true income, the court can impute income. At trial, the court had some notices of assessment but not all. The trial judge inferred that the father earned at least $80,000 as this was consistent with his income from 2015 to 2023.
Therefore, the court did not err in determining that the father should have his income imputed to $80,000.
CONCLUSION
Multiple adverse inferences against the father were made as he did not have proceedings before the court. This issue ultimately stemmed from the father’s failure to provide transparent disclosure. The father was further ordered to pay costs in the amount of $17,500.
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