“The caselaw is clear that this is a three part test reflected by the following subheadings: see the leading case of Drygala v. Pauli, 2002 CanLII 41868 (ONCA) at paragraph 23. Good recent summaries of the factors to be considered and the steps in the analysis are set out in Tillmans v. Tillmans, 2014 ONSC 6773, Pey v. Pey, [2016] O.J. No. 1994 (S.C.J.), and Oyewole v. Adepoju, 2019 ONCJ 111.
The first part of the test is establishing whether the spouse is intentionally under-employed or unemployed. As a general rule, a payor cannot avoid a support obligation by a self-imposed reduction of income (Drygala at paragraph 38). Choosing to earn less than one is capable of earning is intentional under-employment (Drygala at paragraph 28).
The onus is on the spouse claiming imputation to establish an evidentiary foundation for intentional unemployment or under-employment (Berta v. Berta, 2015 ONCA 918 at paragraph 63). Once established, the burden shifts to the purported unemployed or under-employed spouse to establish that the decision was justified in a compelling way (Riel v. Holland (2003), 2003 CanLII 3433 (ON CA), 67 O.R. (3d) 417 (Ont. C.A.) at paragraph 23) and was reasonable, thoughtful, and highly practical (Pey v. Pey, at paragraphs 88 to 91). As noted in Pey, not all career decisions which result in reduced income will be unreasonable.
If there is a finding of intentional under-employment or unemployment, and if applicable, the under-employed or unemployed spouse has the burden of establishing that the decision was required by (1) the needs of any child of the marriage or any child, or by his or her reasonable (2) educational needs or (3) health needs.
If there is unjustified intentional under-employment or unemployment, the last step is to determine what if any income is appropriately imputed in the circumstances. The onus is on the spouse claiming imputation to establish the evidentiary foundation for the amount sought to be imputed (see Berta above). There must be a rational basis underlying the selection of an amount (Drygala at paragraph 44). Drygala sets out considerations at paragraph 45:
45. When imputing income based on intentional under-employment or unemployment, a court must consider what is reasonable in the circumstances. The factors to be considered have been stated in a number of cases as age, education, experience, skills and health of the parent. See, for example, Hanson, supra, and Cholodniuk v. Sears (2001), 2001 SKQB 97 (CanLII), 14 R.F.L. (5th) 9, 204 Sask. R. 268 (Q.B.). I accept those factors as appropriate and relevant considerations and would add such matters as the availability of job opportunities, the number of hours that could be worked in light of the parent’s overall obligations including educational demands and the hourly rate that the parent could reasonably be expected to obtain.
Importantly, as noted in paragraph 46 of that decision as well as in Lawson v. Lawson (2006), 2006 CanLII 26573 (ON CA), 81 O.R. (3d) 321 (Ont. C.A.) at paragraph 38, the amount of imputed income can also be based on the payor’s previous earning history, applying an appropriate percentage. There are numerous examples of this in the jurisprudence: see Olah v. Olah (2000), 2000 CanLII 22590 (ON SC), 7 R.F.L. (5th) 173 (Ont. S.C.); Weir v. Therrien (2001), 2001 CanLII 28136 (ON SC); Vitagliano v. Di Stavolo (2001), 2001 CanLII 28202 (ON SC), 17 R.F.L. (5th) 194 (Ont. S.C.); Zagar v. Zagar, 2006 ONCJ 296 (CanLII); Laing v. Mahmoud, 2011 ONSC 4047 (CanLII); Thompson v. Gilchrist, 2012 ONSC 4137; Stoyko v. Delorome, 2013 ONSC 4232; Walts v. Walts, 2016 ONSC 4777; and Woodenfren v. Woodenfren, 2018 ONSC 4583.”