Siegel's Family Court Calendar

“In R.L. v. M.F., 2023 ONSC 2885, I recently set out the applicable authorities regarding the imputation of income to a spouse at paras. 337 – 345 as follows:

337  The jurisdiction which allows a court to impute income to a spouse on the basis of intentional underemployment, as the Father claims, is found in s. 19(1)(a) of the CSG, which reads as follows:

Imputing income

19(1) The court may impute such amount of income to a parent or spouse as it considers appropriate in the circumstances, which circumstances include,

(a)   the parent or spouse is intentionally under-employed or unemployed, other than where the under-employment or unemployment is required by the needs of any child or by the reasonable educational or health needs of the parent or spouse;

…

338  The leading case regarding the imputation of income to a support payor remains the decision of the Ontario Court of Appeal in Drygala v. Pauli (2002), 2002 CanLII 41868 (ON CA), 61 O.R. (3d) 711. At paragraph 32 of that decision, the Court described the imputation of income as:

 … [O]ne method by which the court gives effect to the joint and ongoing obligation of parents to support their children. In order to meet this legal obligation, a parent must earn what he or she is capable of earning.

339  In Szitas v. Szitas, 2012 ONSC 1548, at para. 56, Chappel J. explained the meaning of intentional underemployment, citing Drygala v. Pauli, as follows:

The Ontario Court of Appeal has held that in determining whether to impute income on the basis that a party is intentionally underemployed or unemployed pursuant to section 19(1)(a) of the Guidelines, it is not necessary to establish bad faith or an attempt to thwart child support obligations. A parent is intentionally underemployed within the meaning of this section if they earn less than they are capable of earning having regard for all of the circumstances. In determining whether to impute income on this basis, the court must consider what is reasonable in the circumstances.

340  In reviewing the caselaw at para. 57, Chappel J. cites the following seven principles that apply to the imputation of income to a support payor:

1. 1. 1. 1. 1. 1. 1. There is a duty on the part of the payor to actively seek out reasonable employment opportunities that will maximize their income potential so as to meet the needs of their children.
                  2. Underemployment must be measured against what is reasonable to expect of the payor having regard for their background, education, training and experience.
                  3. The court will not excuse a party from their child support obligations or reduce these obligations where the party has persisted in un-remunerative employment, or where they have pursued unrealistic or unproductive career aspirations. A self-induced reduction of income is not a basis upon which to avoid or reduce child support payments.
                  4. If a party chooses to pursue self-employment, the court will examine whether this choice was a reasonable one in all of the circumstances, and may impute an income if it determines that the decision was not appropriate having regard for the parent’s child support obligations.
                  5. When a parent experiences a change in their income, they may be given a “grace period” to adjust to the change and seek out employment in their field at a comparable remuneration before income will be imputed to them. However, if they have been unable to secure comparable employment within a reasonable time frame, they will be required to accept other less remunerative opportunities or options outside of the area of their expertise in order to satisfy their obligation to contribute to the support of their children.
                  6. Where a party fails to provide full financial disclosure relating to their income, the court is entitled to draw an adverse inference and to impute income to them.
                  7. The amount of income that the court imputes to a parent is a matter of discretion. The only limitation on the discretion of the court in this regard is that there must be some basis in the evidence for the amount that the court has chosen to impute.

[Citations omitted.]

341  While Chappel J.’s seven principles speak to intentional unemployment by support payors, they nonetheless remain relevant to a claim that a spousal support recipient is intentionally underemployed. While payors are required to maximize their income to support their dependants to the extent possible, as set out in CSG s. 19(1)(a), a person seeking to receive support from that payor should have a concurrent obligation (whether to support themselves or their children). While that factor is always relevant, it is even more material when the claim has a non-compensatory or mixed basis for support.

342  Further, while I have broad discretion to impute income to a payor, that discretion is not absolute. As Gillese J.A. wrote for the Court at para. 44 of Drygala v. Pauli:

Section 19 of the Guidelines is not an invitation to the court to arbitrarily select an amount as imputed income. There must be a rational basis underlying the selection of any such figure. The amount selected as an exercise of the court’s discretion must be grounded in the evidence.

343  At para. 23, the Court set out the following three questions which should be answered by a court in considering a request to impute income under s. 19 (1) (a) of the CSG:

[1]   Is the party intentionally under-employed or unemployed?

[2]   If so, is the intentional under-employment or unemployment required by the needs of any child or by the reasonable educational or health needs of the parent or spouse?

[3]   If not, what income is appropriately imputed?

344  The Court was clear in Drygala v. Pauli that the test for imputing income is the same for both child and spousal support.

345  In Lavie v. Lavie, 2018 ONCA 10, the Court appears to have gone a step further in refining the test for imputing income to a spouse. There, Rouleau J.A., speaking for the Court, set out a very clear black line test for intentional underemployment. It is one in which the subjective reasons for the underemployment, (and by extension, unemployment) are not relevant. He wrote at para. 26:

There is no requirement of bad faith or intention to evade support obligations inherent in intentional underemployment: Drygala v. Pauli, at paras. 24-37. the reasons for underemployment are irrelevant. If a parent is earning less than she or he could be, he or she is intentionally underemployed.”

Gilmore v. Gilmore, 2023 ONSC 5333 (CanLII) at 49

“The net family property approach taken by the Family Law Act is not a perfect system.  It is, however, our system legislated to be applied under these circumstances.  It reflects the values of our culture in a marriage relationship which is one of equal sharing.  That equal sharing is only disturbed if that result is “unconscionable”.  Only then is the court to deviate from an equal sharing of net family property.  It has been interpreted in case law as requiring something more than simply an unfair result.  It must be a result that shocks the conscience of the court.

It is also a reflection of our cultural values that marriage is much more than a business arrangement.  It is a commitment to another person to work together for mutual benefit and recognizes that at times that will include personal sacrifice by putting the other person’s interests ahead of your own.  That sacrifice, in many cases, is much better than “unfair”.  It is priceless.  The Supreme Court of Canada decision of Kerr v. Baranow, 2011 SCC 10 makes it clear that there is a distinction in which property matters are to be dealt with for married and unmarried parties.  Justice Cromwell states as follows at paragraph 1:

In a series of cases spanning 30 years, the Court has wrestled with the financial and property rights of parties on the breakdown of a marriage or domestic relationship.  Now, for married spouses, comprehensive matrimonial property statutes enacted in the late 1970s and 1980s provide the applicable legal framework.  But for unmarried persons in domestic relationships in most common law provinces, judge-made law was and remains the only option.  The main legal mechanisms available to parties and courts have been the resulting trust and the action in unjust enrichment.

Section 5(6) the Family Law Act, R.S.O. 1990, Chapter F.3 reads as follows:

Variation of share

(6)        The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,

(a)        a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;

(b)        the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;

(c)        the part of a spouse’s net family property that consists of gifts made by the other spouse;

(d)      a spouse’s intentional or reckless depletion of his or her net family property;

(e)      the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;

(f)        the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;

(g)        a written agreement between the spouses that is not a domestic contract; or

(h)       any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.  R.S.O. 1990, c. F.3, s. 5(6).

It is clear then from this legislation than an unequal division of net family property is allowed if such a division would be unconscionable having regard to the eight criteria set out and, in our case, particularly, subsection (h).  The wording, “any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property”, is very broad.  Every family situation must be analyzed, when dealing with the net family property scheme, within that context.  It does not require the strict analysis as set out in cases of unmarried parties in rulings on unjust enrichment, constructive trust or proprietary estoppel.  Those considerations may have certain similarities, but the Family Law Act paints with a somewhat broader brush stroke than those equitable reliefs.”

            Calver v. Calver, 2019 ONSC 5418 (CanLII) at 63-66

“The father in this case submitted that the psychotherapist’s letter should be approached with caution as it was not in affidavit form, its’ contents hearsay and it was devoid of helpful details such as the date when the mother began consulting him and her complaints (such as an assault, as opposed to marital unhappiness, depression). I agree with the father. In Lucreziano v Lucreziano, 2021 ONSC 4106, Nakonechny J. reflected on the caution that the court must adopt when dealing with untested doctor letters:

[49]           Rule 14(19) allows for hearsay only in restricted conditions. The case law identifies potential issues with the admissibility of the doctors’ letters attached to a party’s affidavit. In some cases, courts have rejected unsworn doctor’s letters as inadmissible because the letters contained no evidence as to the doctor’s qualifications and there was no opportunity to cross-examine the doctor. While a doctor’s letter or report will not be excluded solely because it is not in the form of an Affidavit, the Court must be satisfied of the truth of the facts contained in the letter or report. [Citations omitted].

            Aslam v. Janakovic, 2024 ONSC 5135 (CanLII) at 27

“The foregoing review of some of the noteworthy cases dealing with the issue of need arising post separation since Bracklow reveals that the courts have been struggling with the issue, attempting to balance considerations respecting the expectations that arise within marriage with the concern that a spouse should not become an insurer for life for their former spouse’s future misfortune that is unconnected to the marriage or its breakdown.  Based on the fundamental principles which the Supreme Court of Canada set out in Moge and Bracklow, and a review of the factors and considerations which have figured prominently in the relevant case law since those decisions were released, I conclude that the following general principles and guidelines for dealing with these cases have emerged:

a.    The starting point for analyzing non-compensatory support claims based on need arising post separation is whether there is evidence during the period prior to separation to rebut the presumption of mutuality and interdependence arising from the marriage relationship itself. Where there is no evidence to rebut this presumption, it may be reasonable to expect that the parties will support each other for a reasonable period of time in the event of need that does not exist at the time of separation but that arises at a later date.

b.    The existence of mutuality and interdependence prior to separation is not, however, a determinative factor favouring a spousal support obligation in the event of need arising post separation.  As the Supreme Court of Canada stated in Moge and Bracklow, all of the objectives underlying a spousal support order must be considered, including the objective of promoting self sufficiency within a reasonable period of time.  The question that must be determined is whether, taking into account all of the circumstances of the particular case, it is reasonable on an objective analysis to expect the parties to continue to be “safety nets” for each other in the event of post separation need, and if so, for how long.

c.    The passage of time may be an important consideration, particularly where the parties both take steps post separation to unravel their interdependencies and to effect a clean break from each other.   In these circumstances, the mutual obligation of support arising from the marriage itself may wane with the passage of time, and the objective of promoting self sufficiency within a reasonable time frame may come more to the forefront of the analysis.  This would include an expectation that former spouses implement plans for their own care in the event of possible disability in the future.

d.    On the other hand, the passage of time may be given less weight in the analysis of entitlement if, despite the passage of a number of years, the parties have not effected a clean break, and their relationship continues to be characterized by mutuality and interdependence.  In such circumstances, an objective analysis of the situation may lead to the conclusion that the expectation of mutual support and dependency arising from the marriage relationship has continued.

e.    Where the marriage was short lived, the objective of promoting self sufficiency may be given greater weight when considering the expectations of the parties.

f.      Situations where a spouse has been awarded time limited compensatory support, and then suffers an unexpected disability which creates need on their part may need to be approached with a somewhat unique lens.  In such cases, the passage of time from the date of separation may not be as compelling a consideration as in cases where no entitlement to support exists at the time of separation.  Time limited compensatory awards are intended in part to provide the recipient with an opportunity to regroup and recover from the economic consequences of the marriage.  If an intervening disability impedes their ability to do so, the objectives of the award are undermined, and the claimant spouse may remain disadvantaged as a result of the marriage.  In these circumstances, the objectives set out in section 15.2(6)(a) and (b) of the Divorce Act may weigh more heavily than the objective of promoting self sufficiency.”

            Fyfe v. Jouppien, 2011 ONSC 5462 (CanLII) at 54

“Civil contempt is a quasi-criminal proceeding. To find a party in contempt of court, the leading cases advise that three elements must be found:

(1)   The order that was breached must state clearly and unequivocally what should and should not have been done;

(2)   The party who disobeys the order must do so deliberately and willfully;

(3)   The breach of the order must be proven beyond a reasonable doubt; Carey v. Laiken, 2015 SCC 17 (CanLII), [2015] 2 S.C.R. 79, at paras. 32-35.

An order may be found to be unclear if, for example, it is missing an essential detail about where, when or to whom it applies; if it incorporates overly broad language, or if external circumstances have obscured its meaning: Ruffolo v. David, 2019 ONCA 385 (CanLII), [2019] O.J. No. 2427 (Ont. C.A.).

The contempt remedy is one of last resort. It should not be sought or granted in family law cases where other adequate remedies are available to the allegedly aggrieved party. Contempt findings should only be made sparingly where conferences to try to resolve access problems or motions for enforcement have failed. The remedy is not available where clear routes were available to the moving party to seek to vary or enforce terms of the order: Hefkey v. Hefkey, 2013 ONCA 44 (CanLII), [2013] O.J. No. 1697 (Ont. C.A.).

Within the context of a family law dispute, the court should also take into account and exercise its discretion based on the best interests of the child. Any ambiguity in the text of the order should be resolved in favour of the person accused of contempt. A failure to comply with an order of the court will not be contempt if there are genuine, unresolved issued between the parties with respect to the manner in which it is to be carried into operation. Ruffolo v. David, 2019 ONCA 385 (CanLII), [2019] O.J. No. 2427 (Ont. C.A.).

After the three criteria from Carey v. Laiken are established beyond a reasonable doubt, the judge must then consider whether she should exercise her discretion to decline to make a finding of contempt. A judge may properly exercise his or her discretion to decline to impose a contempt finding where it would work an injustice in the circumstances of the case. It is especially important for course to consider the discretion to impose a contempt finding in high-conflict matrimonial cases: Chong v. Donnelly, [2019] O.J. No. 5048, 2019 ONCA 799 (Ont. C.A.)”.

Townsend v Marti, 2023 ONSC 5223 (CanLII) at 23-27

“It is worth reiterating at this juncture that the role of the court under s. 23 [of the Children’s Law Reform Act] is to determine whether the party invoking the section has established, on a balance of probabilities, that a child will suffer serious harm if an Ontario court does not assume jurisdiction. For the law of the UAE to qualify as serious harm, that harm would have to be clearly established on the evidence. It is not enough to point to differences in the law and suggest that a parent may have different rights in a foreign jurisdiction vis-à-vis Ontario. The serious harm test in s. 23 of the CLRA, which was implemented to protect the safety of children, must not be reduced to a means for Ontario courts to prefer this province’s system of justice over those of foreign jurisdictions under the guise of child safety.”

            N. v. F., 2021 ONCA 614 (CanLII) at 79

“Section 121(6) of the Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched. 1 (the “CYFSA”) permits a court hearing an appeal in a child protection case to receive further evidence relating to events after the decision under appeal. In Barendregt v. Grebliunas, 2022 SCC 22, [2022] 1 S.C.R. 517, at para. 4, the Supreme Court held that “[i]n cases where the best interests of the child are the primary concern, the Palmer test is sufficiently flexible to recognize that it may be in the interests of justice for a court to have more context before rendering decisions that could profoundly alter the course of a child’s life.” The Palmer test directs the court to consider whether: (i) the evidence could not, by the exercise of due diligence, have been obtained for the trial; (ii) the evidence is relevant in that it bears upon a decisive or potentially decisive issue; (iii) the evidence is credible in the sense that it is reasonably capable of belief; and (iv) the evidence is such that, if believed, it could have affected the result at trial: Barendregt, at para. 29.”

Catholic Children’s Aid Society of Toronto v. R.E., 2025 ONCA 623 (CanLII) at 9

“This is preliminary issue that must be addressed before delving into the law with respect to grandparent access. As noted, the Respondent mother raised the fact that the court could not order contact for the Applicant grandmother in absence of a 35.1A affidavit.

Section 35.1 of the Family Law Rules (“the Rules”), reads as follows:

35.1 (1) If an application, answer or motion to change a final order contains a claim respecting decision-making responsibility, parenting time or contact with respect to a child, the party making the claim shall serve and file with the document that contains the claim,

(a) an affidavit in Form 35.1 and, if the child or any party to the case has been involved in a child protection case or has received services from a child protection agency, an affidavit in Form 35.1A; and

(b) any other documents required by this rule. O. Reg. 42/21, s. 17.

Under the Rules, parties with child welfare involvement are required to file a Form 35.1A affidavit. The Applicant grandmother appears not to have filed this form, or if she did, it was not included in the continuing record transferred from Barrie. The form is not normally included in the continuing record.

While the Rules mandate filing, they do not explicitly prohibit a judge from granting parenting time or contact due to an inadvertent omission of the form. Courts are encouraged to prioritize the child’s best interests, and procedural errors may be remedied if they do not prejudice the other party or compromise child safety.

My own research did not find any discernible case law directly addressing whether a missing Form 35.1A bars the court from making a contact. It was not provided by the Respondent mother either. Rule 1(7), however, does allow for judicial discretion in procedural matters, which suggests that a court could potentially allow the affidavit to be filed late or make directions to cure the defect.

Although this issue is not about pleadings, an area in which case law is available, it can be analogous. Family law proceedings allow for more flexibility than civil litigation. As affirmed in Frick v. Frick, 2016 ONCA 799, the Rules are designed to reflect the unique nature of family cases, emphasizing active case management, early disclosure, and proportionality in resolving disputes.

In Jamieson v. Jamieson, 2020 ONSC 6935, it was held that courts may grant relief that was not explicitly pleaded if two conditions are met:

(1)         It is clear that the relief is warranted; and

(2)         No prejudice arises from the failure to plead the request.

In Khamis v. Noormohamed, 2011 ONCA 127, the Court upheld a trial decision allowing an unequal equalization claim, noting that the opposing party had sufficient notice of the issue.

Where the best interests of a child are at stake, courts are especially inclined to overlook deficiencies in pleadings. This approach was supported in Sleiman v. Sleiman, 2002 CanLII 44930 (ON CA) and Olubowale v. Morgan, 2011 ONCJ 353.

In this case, there is no need to cure the deficiency, seeing a trial has been completed. The Applicant grandmother did complete a 35.1 affidavit. She is a self-represented party and while that comes with rights and obligations, it also comes with some accommodations. This is not a case where the Applicant grandmother attempted to hide any involvement with child welfare agencies. While she did not provide a 31.1A Affidavit, she completed and obtained her Report on Records from every child welfare agency in the jurisdictions she has resided in. We are aware that she had involvement with only one child welfare agency. The report was provided, and the investigator was cross-examined at trial. There is no prejudice.

Normally the lack of information in a 35.1 and 35.1A affidavit would speak of risk to the child, but that has been mitigated through the information already provided and made an exhibit at trial.  Moreover, this particular issue should have been addressed at the trial management conference. Child welfare involvement was known to the parties from the start of the proceedings. It cannot be used at this stage to prevent a decision on the merits. I find that a decision on contact can proceed in the absence of a 35.1A affidavit, where particulars of the Applicant grandmother’s involvement with child welfare agencies have been provided for consideration on the child’s best interests.”

Ruffett v. Ruffett, 2025 ONCJ 568 (CanLII) at 108-118

“Section 19(1) of the Federal Child Support Guidelines permits a court to impute income of someone in Dad’s position if it considers it appropriate in the circumstances.  The section provides a non-exhaustive list of relevant circumstances, including (d), applicable when “it appears that income has been diverted” and (f), when “the spouse has failed to provide income information when under a legal obligation to do so”.

In this case, I am satisfied Mom has established a statutory basis to permit the imputation of income on both grounds:  Michaud v Kasali, 2016 ONSC 443, at para. 47.  However, as Justice McGee explains in Michaud, that is not the end of the exercise.  There must be evidence available in the motion record capable of grounding the inference or imputation:

Rule 19(1)(f) of the Rules is no more than an invitation to fill in the blank when a payor fails to provide income information, as it is when a payor is in default, or his pleadings are struck.  The amount to be imputed must still be grounded in the evidence.  The question to be asked is:  what amount is reasonable in the circumstances?”

Alibdah v Altawil, 2025 ONSC 5109 (CanLII) at 31-32

“When considering the amount of amortization expense, Mr. Evans reduced the amount of amortization expense to $45,000, arguing that it is more consistent with the average for 1618302 over the past five years.  He opined that it was a reasonable adjustment considering its impact on corporate income.  Mr. Evans makes the point that there is no logic in a corporation spending close to one million dollars in equipment purchases only for the owner to be making less than minimum wage at the end of the year.  This is not a reasonable return on the corporate investment. Mr. Evans’ report states that corporate income was adjusted for all years under review.

The amortization expense is also viewed as being unreasonable by Mr. Evans given that the 2018 sale of much of the equipment realized returns that were much higher than the book value. Thus, Jaime’s income for 2018 is significantly higher.

Mr. Clarke disagrees.  He has opined that the rate of amortization is consistent with the maximum amounts permitted by Revenue Canada. He also points to the fact that the Guidelines prohibit amortization for real property but not for equipment.  In terms of the specific amortization expense amounts, Mr. Clarke testified that the amount of amortization was lower than what CRA allows for 2018 but it was higher for 2019 and 2020.  However, based on Exhibit #67, it seems that the dispute only applies to 2019.

Jaime’s accountant, Mr. Mehlman also felt that Jaime’s depreciation is common for similar businesses that have significant assets that can be depreciated. He felt it was common for other similar businesses.

I agree in large part with Mr. Clarke. While I accept that the impact of the amortization expense effectively shelters Jaime from his support obligations, the reality is that the Guidelines specifically prohibit amortization in relation to real property and not for equipment.  This is clearly not an oversight.  To make an arbitrary reduction in the amortization expense to $45,000 does not find any support in s. 19 of the Guidelines.  I am of the view that it is not a principled way of addressing the impact of the amortization expense.

However, the evidence is that Jaime’s amortization expense has not strictly followed the CRA guidelines, and that at least for 2019 and 2020, the amortization expense has exceeded the CRA amounts.  I have no evidence to deal with the excessive amortization expense for certain years but I disagree with the approach of arbitrarily reducing the amount to $45,000.

Some inequity is apparent in the fact that the amortization expense does not get added back to Jaime’s income since it is not related to real property.  Amortization is a non-cash expense that positively impacts corporate cash flow but negatively impacts available corporate income to the shareholder.  A cash flow analysis was done by Mr. Clarke for the years 2015, 2016 and 2017 as part of Exhibit #66.  In that report, Mr. Clarke draws a parallel between the cash flow analysis and the level of income imputed by the court in the amount of $82,000.

It is noteworthy that the cash flow analysis in Exhibit #66 provides a range of cash flow that is between $30,000 to $50,000 higher than Jaime’s reported income.

The issue of positive corporate cash flow becomes more relevant when considering the question of imputed income as will be discussed below.  In the end, I reject Mr. Evan’s approach to reduce amortization to $45,000.”

Davidson v. Davidson, 2022 ONSC 4375 (CanLII) at 178-186