Toronto Registry No. DFO 11 10527 A4

DATE: 2012-02-07

Citation: Khan v. Parlee, 2012 ONCJ 60

ONTARIO COURT OF JUSTICE

BETWEEN:

DOMINIC IVOR KHAN

Applicant

— AND —

KIMBERLEY ANN PARLEE

Respondent

Before Justice Ellen B. Murray

Heard on 31 January 2012

Reasons for Decision released on 7 February 2012

Elizabeth A.R. Julien-Wilson ..................................................................... counsel for the applicant

Michael G. Cochrane .............................................................................. counsel for the respondent

[1] JUSTICE E.B. MURRAY:— The applicant, Dominic Khan, and the respondent, Kimberley Parlee, are the parents of William Parlee Khan (“Billy”), born June 4, 2010. This is my decision on a motion by Mr. Khan requesting temporary custody of Billy, and a cross-motion by Ms. Parlee requesting temporary child support, commencing the date of the parties’ separation in May 2011.

1: BACKGROUND AND HISTORY OF THE CASE

[2] Mr. Khan is 45 years of age. He works as a rowing instructor and an entrepreneur. He has acquired rental properties in the Kirkland Lake area of Ontario which he says he plans to develop as a rowing camp for children. Ms. Parlee is 41 years of age. She works as a television journalist in Toronto. When Billy was born, Ms. Parlee took a year’s leave from work.

[3] The parties’ romantic relationship was brief; they dated a short time before Ms. Parlee became pregnant, and the relationship ended in February 2011.

[4] They lived in Ms. Parlee’s home in Toronto, from the date of Billy’s birth to May 4, 2011, when Mr. Khan left, after he was given funds by Ms. Parlee to obtain alternate accommodation. Billy remained with Ms. Parlee in her home. Billy is the only child of each party.

[5] The parties did not agree on parenting arrangements, and started mediation with Dr. Barbara Fidler on June 16, 2011. Mr. Khan started this application requesting custody of Billy on Friday June 17, 2011, serving Ms. Parlee that evening. She was to return to work on the following Monday. A few days later, Mr. Khan appeared at Ms. Parlee’s door with police, insisting that the child should go with him for the day. Ms. Parlee panicked, fearing a tug-of war over the child. She went to court and obtained an ex parte order granting her temporary custody of Billy, with access to Mr. Khan as agreed by the parties.

[6] A case conference was held before me on July 8, 2011, at which time the parties agreed to a temporary order granting Ms. Parlee custody of the child and providing that Mr. Khan have access 3 days each week, one day from 11 a.m. to 6:30 p.m., and two days from 3 p.m. to 6:30 p.m. The access was subject to certain conditions, including conditions that M r. Khan:

• observe Billy’s sleep and nutrition routine;
• not leave Billy alone with his dogs;
• have a valid driver’s licence and transport Billy in an insured vehicle with a proper car seat;
• ensure that, when Billy was going to be in the sun, he wear a hat and wear sun block;
• not engage Ms. Parlee or day-care workers in “hostile conversation”.

[7] The order also provided for extensive financial disclosure from Mr. Khan from possible sources of income for him — Bayside Rowing Club Inc., Viking Boat Enterprise, Cedar Ridge Lodge and Northwood Lodge. Leave for questioning of each party was granted.

[8] A case conference was held on October 17, 2011. At its conclusion, I scheduled the motion and cross-motion for December 8, 2011, which was later at the parties’ request put over to January 31, 2012.

[9] In December 2011, the parties agreed to expand access to include overnight stays commencing mid-December. Mr. Khan now sees Billy on alternate weekends, from Saturday at 3:30 p.m. to Sunday at 3:30 p.m.; each Thursday, from 3 p.m. to Friday at 8:30 a.m.; and each Tuesday from 11 a.m. to 6:30 p.m.

[10] There has been not a temporary order for child support. In May 2011, Mr. Khan paid Ms. Parlee $1,500 towards such support based on his understanding of an oral agreement they had (prior to his commencing this action) that he pay $300 monthly. He has not made any support payments since.

2: POSITIONS OF THE PARTIES

[11] Mr. Khan’s request in more detail is this:

1. Temporary custody to him, with access to Ms. Parlee on weekends from Fridays at 4 p.m. to Monday at 8 a.m., plus a mid-week visit, or in the alternative,
2. A temporary “parenting arrangement” that provides that Billy reside with him 4 days each week and with Ms. Parlee, 3 days each week, or in the further alternative,
3. A temporary “parenting arrangement” that on a four week cycle provides that the child spends equal time with each parent, with transfers to occur twice each week.

He asks for police enforcement of any residential schedule.

[12] Mr. Khan submits that he is well able to care for Billy, having helped with the care of younger members of his family. He says that he provided much of the care Billy required when the parties cohabited. He has plenty of time to care for Billy, as he does not work many hours, and what hours he does work are flexible. He fears that Ms. Parlee is trying to cut him out of Billy’s life and sees a custody order or a shared parenting arrangement as a defence. Mr. Khan’s lawyer in her submissions was candid in saying that the claim for custody was “a knee -jerk reaction”, and she did not pursue an argument that Mr. Khan should be granted temporary custody. However, she did vigorously submit that I should make an order of joint custody or shared parenting, and impose a residence schedule for the child that places Billy with Mr. Khan 50-60% of the time.

[13] Ms. Parlee says that she is stable, responsible and well able to care for Billy and to make the major decisions about his upbringing that might be required until this matter is resolved. She opposes any change in the child’s schedule at this time and says that any shared decision-making arrangement with Mr. Khan is not workable. She wants Billy to have a good relationship and frequent contact with Mr. Khan.

[14] Ms. Parlee has concerns about Mr. Khan’s ability to provide a stable routine for Billy. She says that he is irresponsible and unreliable and that, while they cohabited, he had a chaotic lifestyle. She says that, “I was like a single parent”; he was in the Kirkland Lake area for his business much of the time, and his participation in Billy’s care was minimal. She questions whether Mr. Khan’s business enterprise in Kirkland Lake and work in Toronto leave him the time he claims he has to care for Billy. Ms. Parlee also has concerns for Billy’s safety when he is with Mr. Khan.

[15] With regards to Ms. Parlee’s claim for child support, her lawyer submits that Mr. Khan’s disclosure is incomplete and does not meet the standard expected of a self-employed individual that will allow the opposing party or the court to have an accurate picture of his income. Ms. Parlee’s motion originally asked that I order child support based on income imputed to Mr. Khan of $100,000 annually. By the time the motion was argued, after questioning of Mr. Khan and examination of some disclosure provided, Ms. Parlee’s lawyer requested that I impute income to him of $240,000 annually.

[16] Mr. Khan’s position is that his income for child support purposes should be found to be $22,000 annually, the amount that he swore to in his questioning. If the court is inclined to impute income to him, his lawyer suggests that it be in the amount of $50,000 annually. Mr. Khan did not claim child support payments from Ms. Parlee in his motion; his lawyer said that, if he was successful with respect to his claim for a shared parenting arrangement under which Billy would reside with him 50-60% of the time, he would pursue a claim for such support.

[17] Below I consider the evidence, in light of the law to be applied.

3: TEMPORARY CUSTODY/ACCESS

[18] Mr. Khan’s counsel submits that there is “no evidence” that a joint custody arrangement of some type with an equal-time residence schedule should not be ordered. Her argument proceeds as if there is a presumption in law for joint custody and such a schedule. That is not the case.

[19] In deciding what temporary parenting arrangements are appropriate for Billy, I must be guided by what is in his best interests, assessed in light of the factors set out at Section 24 of the Children’s Law Reform Act, R.S.O. 1990, c. C-12, as amended, set out below:

(a) the love, affection and emotional ties between the child and, (i) each person entitled to or claiming custody of or access to the child, (ii) other members of the child’s family who reside with the child, and (iii) persons involved in the care and upbringing of the child; (b) the views and preferences of the child, where such views and preferences can reasonably be ascertained; (c) the length of time the child has lived in a stable home environment; (d) the ability and willingness of each person applying for custody of the child to provide the child with guidance and education, the necessaries of life and any special needs of the child; (e) the plan proposed by each person applying for custody of or access to the child for the child’s care and upbringing; (f) the permanence and stability of the family unit with which it is proposed that the child will live; (g) the ability of each person applying for custody of or access to the child to act as a parent; and (h) the relationship by blood or through an adoption order between the child and each person who is a party to the application.

[20] I will deal first with the appropriate order for Billy’s temporary residential schedule, in reference to the relevant best interests factors.

[21] Love and affection. It is clear that Mr. Khan and Ms. Parlee both love Billy very much. I heard no evidence about the strength or quality of Billy’s ties to either parent.

[22] Length of time in a stable home environment. Billy has lived primarily with Ms. Parlee since May 2011, a lengthy time for a 20-month-old child. Billy just started a new residential routine six weeks ago, which involves three overnight visits every two weeks.

[23] Ability and willingness to parent. Mr. Khan does not question that Ms. Parlee provides excellent care for Billy. His only concern is that she is overly focussed on maintaining a routine for the child.

[24] Ms. Parlee has concerns about Mr. Khan’s ability to parent. She alleges that Mr. Khan is careless about Billy’s health and safety. Most of these concerns are denied by Mr. Khan, and there is no independent evidence available. For example, Ms. Parlee alleges that Mr. Khan has taken Billy out in the rain without raingear, and that he fails to insure that Billy wears a hat and sun block when the child is in the sun. Mr. Khan denies these allegations.

[25] Ms. Parlee did produce independent evidence in reference to one of her safety concerns. She alleged that Mr. Khan had left Billy unattended, sitting on top of his truck; when Mr. Khan denied this, she produced a picture taken by a neighbour to corroborate the allegation. The picture shows Billy sitting at the edge of a locker in the truck’s bay, feet dangling over the sidewalk; Mr. Khan is nearby, apparently removing something from the cab of the truck. I would not say the child was left “unattended”, but I can understand why Ms. Parlee was concerned about the situation — Billy was four feet off the ground, not restrained, and Mr. Khan had taken his eyes off the child as he removed items from the vehicle.

[26] However, the fact that Ms. Parlee agreed in December to begin overnight access indicates to me that her safety concerns have diminished over the past six months, since the parties have had a regular access schedule.

[27] Ms. Parlee also has concerns that Mr. Khan disregards Billy’s routine with respect to meal-time and nap-time. Mr. Khan denies this. Both parties agree in their affidavits that maintaining a routine is beneficial for a toddler such as Billy. However, Mr. Khan also says in his affidavit that he does not regulate Billy’s time with him by the clock, and feeds Billy when he is hungry, and puts him to sleep when he is sleepy. I infer that Mr. Khan is not as diligent in maintaining a routine for the child as Ms. Parlee is.

[28] The evidence demonstrates Ms. Parlee’s ability to parent Billy well, and also shows that Mr. Khan has the ability to be a good parent to Billy. I think that Mr. Khan could benefit from a parenting course that focused on toddlers, and in particular on safety issues for children that age. Completion of such a course might raise the level of trust between him and Ms. Parlee.

[29] Each parent’s plan/stability of that plan. Ms. Parlee offers a plan for Billy’s care that is stable and meets the child’s needs. She and Billy live in a home owned by her. She works outside the home during daytime hours, Monday to Friday, on a schedule that does not demand out-of-town travel, as her “pre-Billy” schedule did. She has reliable day care in place.

[30] Mr. Khan’s plan is not so stable. His work and business commitments and his future schedule are unclear. He says that he is flexible and able to care for Billy on any of the schedules suggested by him. However, he also swore in his affidavit that, although he has a manager for his business in Kirkland Lake, he spends an average of two days each week there for the business. Mr. Khan’s evidence is that his only source of income is from his work through the Bayside Rowing Club and that his work schedule there is broken into three periods — a “busy period” in the spring, a period of “minimum to medium” activity, and a period of “no activity”. He did not particularize when these other periods occur. I note that “spring” begins next month.

[31] It does not appear that Mr. Khan has given careful thought to structuring a realistic plan that would meet Billy’s needs if the child was living with him 50-60% of the time, as proposed. In his Form 35.1 affidavit, he states that he will hire “part-time nannies to help in-house for half-days who speak a foreign language (Monday-German; Tuesday-French; Wednesday-Spanish; Thursday-Mandarin; Friday-Hindi).” Mr. Khan confirmed that this was his plan when he was questioned on November 28, 2011. He did not explain how he would pay these individuals from his stated income of $22,000 annually.

3.1: Conclusion

[32] In my view, it is in Billy’s best interest that his current residential schedule agreed upon by the parties in December 2011 remain in place, and I so order. Ms. Parlee’s plan for Billy’s care is more stable than Mr. Khan’s, and more realistically oriented to the child’s needs. I see no reason to effect another change in the child’s schedule and routine so soon after the significant changes recently made.

[33] As for the issue of what custodial arrangement is appropriate, in my view, there is not sufficient co-operation and trust between the parties at this time to persuade me that an order for joint custody or shared decision-making of some type is in Billy’s best interests. The fact that Mr. Khan requested an order of police assistance to enforce the child’s residential schedule — when there is no evidence that Ms. Parlee has not complied with the current order — is an indicator of the low level of trust and communication between the parties.

[34] Ms. Parlee has demonstrated that she has been able to formulate and execute a realistic plan that meets Billy’s needs. Billy is residing primarily with her. There are not many occasions when a major decision about a child’s upbringing needs to be made but, when such a decision is necessary, it is important that it is clear to third parties who has the authority to make that decision. It is in Billy’s best interest that an order be made that provides that Ms. Parlee have temporary custody of the child and that she consult with Mr. Khan with respect to any major decisions about the child’s health and upbringing.

4: TEMPORARY CHILD SUPPORT

[35] The principal issue which I must decide in order to determine appropriate temporary support for Billy is Mr. Khan’s income for guideline purposes.

[36] The Child Support Guidelines, O. Reg. 391/97, as amended, determine a table amount of child support payable based on the payor’s income; any contribution towards a child’s special expenses is determined in reference to each parent’s income. The onus is on a payor to prove his income. Section 21 of the guidelines sets out certain basic documents that must be provided in a support case, including the three most recent financial statements from a business of a self-employed individual such as Mr. Khan. Mr. Khan did not provide financial statements for any of the businesses he operates.

[37] Rule 13 of the Family Law Rules, O. Reg. 114/99, as amended, provides that a party in a support case shall serve and file a financial statement[^1], and in that statement make “full and frank disclosure of the party’s financial situation”[^2] . The rule imposes an obligation to immediately correct any information that is “incorrect or incomplete”, and to update the statement if there is a material change in any of the information provided[^3].

[38] A self-employed individual such as Mr. Khan has a positive obligation to put provide a comprehensive record of gross income and expenses. The court may draw an adverse inference if such information is not provided. See Macleod v. MacLeod (1998), 81 A.C.W.S. (3d) 607, [1998] O.J. No. 3076, 1998 Cars­well­Ont 3058 (Ont. Gen. Div.). In Meade v. Meade,[^4] 31 R.F.L. (5th) 88, [2002] O.J. No. 3155, 2002 Cars­well­Ont 2670 (Ont. S.C.), Justice Frances P. Kiteley described what such comprehensive disclosure entails:

[81] . . . It is inherent in the circumstances of those who are self-employed or who have irregular income and expenses, that they have a positive obligation to put forward not only adequate, but comprehensive records of income and expenses. That does not mean audited statements. But it does mean a package from which the recipient spouse can draw conclusions and the amount of child support can be established. Where disclosure is inadequate and inferences are to be drawn, they should be favourable to the spouse who is confronted with the challenge of making sense out of financial disclosure, and against the spouse whose records are so inadequate or whose response to the obligation to produce is so unhelpful that cumbersome calculations and intensive and costly investigations or examinations are necessary.

[39] Ms. Parlee’s lawyer submits that Mr. Khan has not made full and intelligible disclosure about the particulars of his income, and that Mr. Khan’s evidence about his income and expenses is fraught with inconsistencies and some outright misrepresentations. I agree. I add that Mr. Khan has failed to supplement incomplete information or to correct incorrect information initially provided by him, as required by rule 13.

[40] Mr. Khan’s lawyer makes little defence of the sufficiency and accuracy of his disclosure, except to say that he intends to have his accountant prepare his business financial statements and to re-file his personal returns.

[41] Mr. Khan’s sworn financial statement says that his annual income is $17,895, and that he has no assets or debts. To this financial statement he attaches a further page which he labels “Business Assets: Northwood Lodge Inc.”, indicating that this corporation has a net worth of $1,092,925 (total assets are $2,284,619 and total liabilities are $1,191,694). The assets consist of the properties at Northwood Lodge and Cedar Ridge Lodge in the Kirkland Lake area, and the liabilities are the mortgages against those properties. However, although the evidence indicates that a corporation called Northwood Lodge Inc. exists, that corporation does not own either of the properties referred to above; they are owned by Mr. Khan personally, and he is personally liable on the mortgages.

[42] Mr. Khan operates financially in six capacities:

1. as Dominic Khan personally;
2. through Bayside Rowing Inc. as its President, Executive Director and sole full-time employee;
3. through a sole proprietorship called Viking Boats;
4. through a sole proprietorship called Northwood Lodge;
5. through a sole proprietorship called Cedar Ridge Lodge;
6. through a sole proprietorship called Training Wheels.

4.1: Income from Bayside

[43] According to Mr. Khan’s financial statement, his only source of income currently is money he receives from Bayside Rowing Club Inc., which Mr. Khan says is a non-profit corporation. Although at times Mr. Khan refers to himself as an employee of Bayside, on his tax returns he shows only business income, and no employment income. On questioning, he confirmed that he is not employed by Bayside, but provides services through Bayside as a self-employed person.

[44] For the three years of personal tax returns provided, Mr. Khan’s gross and net business income shown on the returns is the same (i.e., there are no deductions from gross). The amounts shown are below a minimum wage income — $17,600 for 2008, $17,900 for 2009, and $17,895 for 2010.

[45] Despite disclosure requests from Ms. Parlee’s lawyer, Mr. Khan produced no documentary evidence confirming the quantum of the payments he receives from Bayside.

[46] In questioning, Mr. Khan stated that he was the founding member of Bayside; that he is the President, Executive Director, and sole employee of Bayside; and that he is responsible for all deposits and withdrawals in and out of the company’s bank account, as well as for its day-to-day operation. He has the authority to borrow money for Bayside. Mr. Khan was asked by Ms. Parlee’s lawyer to produce financial records from Bayside to verify what monies are paid directly to him or on his behalf by the corporation. Mr. Khan’s position is that he has no authority to release these records. He produced a letter from an individual named Gail Nagy whom he says is also on the Bayside Board, stating that Bayside will not provide the records.

[47] Over the past 18 months, Mr. Khan has given varying statements as to his income from Bayside:

• In his financial statement sworn on September 18, 2011, he says that his income is $17,895 annually, and that he is employed by Bayside Rowing;
• In his tax return for 2010, he said his income was $17, 895 (but he admitted on questioning that the income information in this return is not accurate);
• In his questioning on November 28, 2011, he said his income is $22,000 annually;
• In his loan application to a bank in May 2010, he said his income from Bayside is $80,000 annually (he said in questioning that this was a lie);
• In a loan application made in September 2011, he said his income from Bayside —where he has been employed “for 18½ years”— is $24,000 annually;
• In his questioning on November 28, 2011, he said that he has received no money from Bayside for “over a year”.

4.2: Undisclosed Benefits

[48] Although Mr. Khan did not disclose on his sworn financial statement his receipt of any benefits from Bayside or any of his businesses, on questioning he admitted that his relationship with Bayside provides the following benefits:

• use of a vehicle, a 2003 Dodge Ram, at no cost;
• gas and oil for the vehicle;
• vehicle licence, parking other vehicle expenses;
• a cell phone with Internet access;
• payment of expenses such as his electricity and other utilities for his home.
• payment for a policy of insurance on his life.

[49] Mr. Khan also admitted that some of his other expenses are paid through his business ventures. For example, the insurance on the truck he drives is paid through the policy insuring Northwood Lodge. These expenses are not quantified on Mr. Khan’s financial statement, and he gave no evidence as to his estimate of the value of these various benefits[^5].

4.3: Misstatement of Rental Paid

[50] It emerged on questioning that the rent Mr. Khan pays for his home in Toronto is twice that which he swore on his financial statement — $1700/month, not $850/month. Thus, the rent which Mr. Khan actually pays exceeds what he claimed on his financial statement is his total monthly income.

4.4: Mr. Khan’s Business Ventures

[51] Viking Boats, Northwood Lodge, Cedar Ridge Lodge, and Training Wheels are sole proprietorships. No financial statements were produced for any of these businesses. Mr. Khan stated that he did not have time to do these financial statements, but intended to have them prepared in the future. Mr. Khan’s position is that he does not earn income from these concerns and none is declared on his tax returns.

[52] Mr. Khan sells rowing classes through Viking Boats. He made cash withdrawals from Viking Boat’s account totalling $21,780 between January and November, 2011. He says that he has “no idea” how much revenue Viking Boats generated in 2011. Mr. Khan asserts that the money produced through Viking Boats is given by him to Bayside to “keep it going” because membership is declining. He offered no documentary evidence to support this assertion.

[53] Mr. Khan purchased the Northwood Lodge and Cedar Ridge Lodge properties in August 2010. His evidence is that currently income is generated from Cedar Ridge and Northwood through rental of accommodation to miners or contractors in the area, and that these monies are being used to develop the businesses. Mr. Khan states that he employs a manager for these businesses. Although in his affidavit Mr. Khan says that his plans for these lodges are to develop a rowing camp for children, in the business plan drafted to solicit further funds for the properties’ development in July 2011, Mr. Khan said that his objective is to create a “thriving lodge resort for the greater Kirkland Lake area and its burgeoning gold mining sector”.

[54] Mr. Khan produced bank records for Cedar Ridge and Viking (but not Northwood or Training Wheels). It is apparent from those account records and from his questioning that Mr. Khan does not really distinguish between personal and business expenses and that Mr. Khan pays many personal expenses from these accounts. In fact, his financial statement discloses no personal bank accounts.

[55] Ms. Parlee’s lawyer could not quantify the total amount paid from these accounts for personal expenses; forensic assistance would be required for this exercise. He was able to demonstrate from account records that since the summer of 2010 Mr. Khan has written cheques from these accounts averaging about $20,000 monthly. Some of the cheques written on the Cedar Ridge account are for mortgage payments on the two properties, which total approximately $8,000 monthly. However, there are many cash withdrawals and cheques for what appear to be personal expenses — e.g., payments for restaurants, fast food outlets, groceries, LCBO, pet care, vehicle repair. Mr. Khan’s lawyer argues that some of these expenses relate to the business of the lodges, but admits that the records provided do not allow me to distinguish between Mr. Khan’s personal expenditures and monies that might have been spent for the businesses.

[56] Mr. Khan’s business plan of July 2011 for Northwood/Cedar Ridge projects net income between August 2011 and May 2012 of $163,419. The business plan took into account payment of all projected operating expenses, including payments mortgages on the properties except for two small mortgages, one owing to Tim Milward of $50,000 and one owing to Ms. Parlee. Payments are not being made on Ms. Parlee’s mortgage, but are on all other mortgages. The net income projected for Northwood/Cedar Ridge, if annualized, is $217,891 ($18,157.65 monthly).

4.5: Imputing Income

[57] Section 19 of the guidelines gives the court discretion to impute income to a payor “as it considers appropriate under the circumstances”; the circumstances set out include:

• those in which a party has failed to provide accurate income information when legally required to do so,
• those in which a party unreasonably deducts expenses from income.

[58] The list of circumstances in which it is reasonable to impute income to a party is not inclusive, and has been found to include circumstances in which a party has not reported income to a tax authority. See Rivard v. Hankewiecz, 2007 ONCJ 180, 38 R.F.L. (6th) 189, [2007] O.J. No. 2033, 2007 Cars­well­Ont 3363 (Ont. C.J.). Mr. Khan has clearly given inaccurate, incomplete, and misleading income information. The evidence indicates that he enjoys substantial income and financial benefits that he does not declare on his tax returns. If Mr. Khan had prepared business financial statements, it could also be said that he unreasonably deducts expenses from income.

[59] I have no difficulty in deciding that income should be imputed to Mr. Khan under all these heads. The question is; what is the appropriate amount to be imputed? As was said in Smithen v. Polychronopoulos, [2006] O.J. No. 5566 (Ont. S.C.): “A court should not impute income arbitrarily. There must be a rational basis, grounded in the evidence, on which to base such a figure”.[^6]

[60] One approach to income determination is that suggested by Ms. Parlee’s lawyer. He submits that I should impute the annual amount of $240,000, representing the $20,000 monthly in cheques written by Mr. Khan out of the accounts for Northwood and Viking Boats.

[61] I do not accept that submission. The evidence indicates that $8,000 monthly of those cheques represents mortgage payments on the Northwood and Cedar Ridge properties, and that approximately $2,000 monthly represents payments on insurance for those properties (although, as noted above, the policy also covers the vehicle driven by Mr. Khan). If Mr. Khan had prepared proper financial statements for these businesses and prepared proper tax returns, then his line 150 income would reflect not the gross income to him from these businesses, but the net income, after payment of business expenses.

[62] Another approach to income determination is that suggested by Mr. Khan’s lawyer, to use a figure of $50,000 annually. She did not explain the basis for this figure. It may refer to Mr. Khan’s evidence that he hoped to eventually earn $50,000 annually from the lodge businesses. If so, it ignores the income he earns from Bayside. I do not find this approach to be satisfactory.

[63] A third approach to income determination would be to find that his income is represented by the $10,000 monthly written in cheques by Mr. Khan, the amount remaining after deduction of the expenses for mortgage and insurance on the lodge properties. This ignores any other expenses related to these businesses, but Mr. Khan has not provided evidence of those expenses. Using this approach, without gross-up but adding in the $22,000 Mr. Khan says he earns from Bayside, his annual income for guideline purposes would be $142,000.

[64] A fourth approach to income determination would be to reference the net annual income for Northwood and Cedar Ridge projected last July by Mr. Khan of $217,891. I do not have up-to-date actual income figures because Mr. Khan has not provided them. This figure ignores income from Bayside and from Viking Boats.

[65] A fifth approach would be to base income on the cost of financing his lifestyle[^7]. Unfortunately, I do not have an accurate picture of what those costs are, again because Mr. Khan has not provided that information. His provides no information about the value of benefits which he receives from his association with Bayside, no information about the amount of personal expenses paid through his other business ventures, and no information about the expenses he pays with cash withdrawn from business accounts.

[66] Mr. Khan swears on his financial statement that he spends $22, 284 annually on his expenses — about the same amount that he now says is his annual income. In fact, $22,284 is about the same amount that he spends on rental of his home — $1,700 monthly. To get an accurate picture of the total cost of Mr. Khan’s lifestyle, further amounts must be added to his list of expenditures — beginning with the amount of $850 monthly, representing the additional rental cost of his house not shown on his statement. The cost or value of the many living expenses not mentioned on the statement would also have to be considered:

• All utilities for his home.
• Phone and cell phone and internet.
• Notional cost of lease of the Dodge truck provided to him through Bayside.
• Other expenses for transportation, such as insurance, license, parking, gas, oil and repairs and maintenance (these expenses would be considerable, given his regular travel to Kirkland Lake).
• Medical, dental or drug expenses.
• Clothing.
• Entertainment.
• Gifts.
• Food and pet care costs for his two dogs.
• Accountant’s fees for preparation of personal returns.

[67] Any amount of undeclared income, including undeclared benefits, would have to be grossed up, and added to his declared income, to determine a proper income for guideline purposes[^8] As an example, the results of such an exercise would be that if undeclared income/benefits of $40,000 were added to Mr. Khan’s stated income of $22,000, his total annual income after the gross-up would be $77,935; if $50,000 of undeclared income/benefits were added to his stated income of $22,000, his total annual income after the gross-up would be $95,115.

4.6: Conclusion

[68] These last three approaches to income determination are rational and evidence-based. They are not perfect, but in my view it cannot lie in Mr. Khan’s mouth to expect a perfect approach, since the exercise of imputing income is only necessary because he has either withheld relevant information or misrepresented the facts. Because I make this decision at an interim stage, I am taking a conservative approach to the imputation of income to Mr. Khan. In my view, it is appropriate to add to Mr. Khan’s stated annual income of $22,000 a further imputed amount of $78,000, inclusive of the gross-up. This means that Mr. Khan’s income for guideline purposes is $100,000 annually.

[69] Based on this income, I order that Mr. Khan pay temporary support for Billy in a table amount of $877 monthly commencing June 1, 2011, reducing to $808 monthly on January 1, 2012, based on the amended tables which took effect on that date. Mr. Khan shall receive credit for his payment of $1,500 made in 2011 when the arrears created by this order are calculated.

[70] Ms. Parlee has incurred costs for day care for Billy, costs incurred in order that she can work. Ms. Parlee’s annual income is $137,232. She claims a proportionate contribution for Mr. Khan to the day-care costs under section 7 of the guidelines. He has not contributed to those costs. Those costs from June 2011 to January 2012 total $10,673. Adjusted for the tax deduction Ms. Parlee receives at a rate of 37%, day care has cost Ms. Parlee $6,724 over this period. Mr. Khan’s share of Billy’s day-care cost is 42%. He shall pay to Ms. Parlee forthwith the sum of $2,824 ($6,724 x 0.42) and shall, in addition to the table amount of support, pay the sum of $360.78 monthly commencing February 1, 2012. This latter sum is Mr. Khan’s proportionate share of Billy’s monthly day-care cost (total is $1363/mo, reduced to $859/mo after reduction of 37% for Ms. Parlee’s tax benefit, Mr. Khan’s share being 42%).

[71] Ms. Parlee’s counsel indicated in his factum that he seeks costs. He shall serve and file written submissions no longer than 4 pages, together with his bill of costs, by February 20, 2012. Mr. Khan’s reply should be served and filed by March 6, 2012.

Released on: February 7, 2012

Justice E.B. Murray

[^1]: Subrule 13(1). [^2]: Subrule 13(6). [^3]: Subrule 13(15). [^4]: See also Whelan v. O’Connor, 2006 CanLII 13554, 28 R.F.L. (6th) 433, [2006] O.J. No. 1660, [2006] O.T.C. 409, 2006 Cars­well­Ont 2581 (Ont. Fam. Ct.), per Justice V. Jennifer MacKinnon. [^5]: Except for an estimate that his phone bill is about $100 monthly. [^6]: See also Drygala v. Pauli, 2002 CanLII 41868, 61 O.R. (3d) 711, 164 O.A.C. 241, 219 D.L.R. (4th) 319, 29 R.F.L. (5th) 293, [2002] O.J. No. 3731, 2002 Cars­well­Ont 3228 (Ont. C.A.). [^7]: For example, see Orszak v. Orszak, 2000 CanLII 22529, 8 R.F.L. (5th) 350, [2000] O.J. No. 1606, 2000 Cars­well­Ont 1574 (Ont. S.C.). [^8]: See Sarafinchin v. Sarafinchin, 2000 CanLII 22639, 189 D.L.R. (4th) 741, [2000] O.J. No. 2855, 2000 Cars­well­Ont 2640 (Ont. S.C.); Riel v. Holland, 2003 CanLII 3433, 67 O.R. (3d) 417, 177 O.A.C. 162, 232 D.L.R. (4th) 264, 42 R.F.L. (5th) 120, [2003] O.J. No. 3901, 2003 Cars­well­Ont 3828 (Ont. C.A.).