Leal v. Leal, 2022 ONSC 3813

Court File and Parties

COURT FILE NO.: 16-0458 DATE: 2022/06/27

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Jillian Alys Leal Plaintiff

– and –

Jose Manual Cuoto Leal (deceased) Respondent

Counsel: Fan Mackenzie, for the Plaintiff Jennifer A. O’Reilly, for the Respondent

HEARD: March 29, 2022

DECISION ON MOTION RE IMPUTING INCOME, CHILD SUPPORT ARREARS, AND S. 7 EXPENSES

SOMJI J

Overview

1This case addresses whether and in what amounts income should be imputed to self-employed persons for the purpose of determining child support. The father argues that since separation, his personal income which he pays himself from his business has remained between $55,000 and $65,000 whereas the mother’s income has increased to over $100,000. Given the parties have shared parenting of the two children, the father brings a motion seeks retroactive child support dating back to July 2019 based on the offset amount as calculated under the Child Support Guidelines, O. Reg. 391/97 as am. The father also seeks an increase in ongoing child support and reimbursement for daycare expenses.

2The mother argues that the father has used his business for personal expenses and deliberately underpaid himself to keep his income low to minimize his child support obligations. The mother claims that the father’s reported income is not reflective of the actual income he derives from his business and should be imputed to $135,000 a year. On the basis of the imputed income, the father would actually owe her child support for the years 2019 to 2022.

3The issues to be decided are one, should income be imputed to the father on account of his self-employment for the purposes of calculating child support arrears, and two, are s. 7 expenses owed, including childcare to either party?

4This motion was heard in the spring of 2022 and the decision was under reserve. Sadly, the father has since passed away. Consequently, this decision will be limited to the issue of child support and s. 7 expense arrears.

Evidence

5In addition to the parties’ factums, I have relied on the following evidence:

1. Motion to Change of Jose Leal (father) dated July 2, 2019
2. Change Information Form of Jose Leal dated July 2, 2019
3. Affidavits of Jose Leal dated August 27, 2021, January 28, 2022, and March 9, 2022
4. Financial Statements of Jose Leal dated May 21, 2020, and January 28, 2022
5. Affidavit of Colleen Ferguson dated March 9, 2022
6. Amended Response to Motion to Change of Jillian Leal (mother) dated July 31, 2019
7. Affidavits of Jillian Leal dated February 24, 2022
8. Financial Statement of Jillian Leal dated February 24, 2022
9. Expert Reports of Barry Casselman dated July 22, 2021, August 26, 2021, and January 26, 2022 (being an Addendum)
10. Expert Report of Rick Evans dated February 22, 2022

Issue 1: what is the father’s income for child support purposes?

6The parties married in 2008 and separated in 2016. They have two children ages 9 and 11. At the time of separation, Justice Kershman issued an Order for shared parenting on consent of the parties. Given the parties’ incomes were comparable, no child support was payable at the time after the offset calculation was done. Child support was to be reviewed annually. The parties also agreed to share s. 7 expenses equally in accordance with the Guidelines: Order of Justice Kershman October 10, 2018 (“Final Order”).

7In July 2019, the father brought a Motion to Change in relation to child support. The motion was adjourned due to the COVID-19 delays. The mother had effective notice by July 2019 that the father was seeking child support arrears based on the parties’ change in incomes.

8In her initial Response to the Motion to Change in July 2019, the mother does not specifically request child support arrears on grounds that the father’s income should be imputed at a higher rate. However, she reports that the father did not initially provide disclosure of his income as required by the Final Order or submitted a financial statement with his motion materials.

9Later, pursuant to Justice Abram’s Order of May 27, 2020, the mother amends her Response to indicate that she has now learned that the father’s corporate revenues from his business had increased from $330,054 to $514,063 suggesting that his annual income would also be correspondingly higher. In her Amended Response, she seeks to impute the father’s income to at least $125,000 annually and seeks child support arrears. I find that had the mother had this disclosure been available to her, her request for child support arrears would date back to July 2019.

10The father was the sole shareholder of an incorporated business known as Rockform Concrete Kemptville Ltd. (“Rockform”) which specializes in the formation and installation of residential foundations. He operated as a subcontractor for contractors who have been hired by large housing development firms to install residential foundations in new developments. The father relied on a blueprint for the proposed foundation. He coordinated the inspection of the footings and arranged for the delivery and pouring of concrete. He oversaw the curing of the concrete and did the final patching and preparation for waterproofing. He did not do his own concrete forms, but relied on those provided by other contractors. The work is largely seasonal running from May to November. He had a crew of 4-18 people who were hired seasonally and who then collected EI benefits. The father was responsible for all aspects of the business. There were no other managers.

11The father stated that during COVID- 19, the company’s installations were suspended for three weeks in March 2020. Thereafter, the number of employees that could work on site was reduced due to labour Guidelines which impacted the efficiency of the operation. Rockform also received the COVID-19 small business loan.

12The father derived his income entirely from the business. He determined how much he paid himself from his business. He argued that that even though Rockform’s gross revenues increased, the company’s net income had not. Consequently, since separation in 2016, he could only afford to pay himself a personal income between $55,000 and $62,000. It is this income which is used to calculate his child support obligations. A table of Rockform’s revenues and the parties’ respective incomes for the years 2014 to 2021 was prepared by counsel for the mother and is set out below:

Table 1

Time period	Oct 2020 – Sept 2021	Oct 2019 – Sept 2020	Oct 2018 – Sept 2019	Oct 2017 – Sept 2018	Oct 2016 – Sept 2017	Oct 2015 – Sept 2016	Oct 2014 – Sept 2015
Rockform’s gross revenues	$376,274	$475,952	$514,063	$508,245	$330,054	$335,274	$503,401
Rockform’s FS prepared	Nov 5 2021	Jan 18 2021	Jul 2 2020	Oct 10 2019	July 12 2018	July 27 2017
Tax year	2021	2020	2019	2018	2017	2016	2015
Jose Leal	$62,400	$60,250	$50,400	$55,200	$55,000	$60,000	$104,600
Jillian Leal	$106,455	$97,232	$89,257	$88,338	$77,087	$75,727	$73,181

13Rockform maintained a single business bank account and had a business credit card. The father argued that while he did rely on his business to pay for some expenses such as a truck, cell phone, and home office expenses, he did not use his business account for personal expenses and certainly not to the extent proposed by the mother. In support of his position, the father relied on expert reports of Barry Casselman who did a net worth analysis of the father for the period December 31, 2019 to December 31, 2020 and a later addendum for 2021. Expert Casselman concluded that the father’s reported line 150 income for 2020 of $60,250 is a fair representation of his income. Mr. Casselman concluded that at most, it should be increased to $65,000 to account for interest on a shareholder loan, phone expenses, and personal expenditures paid for cash that the father could not account for. In his addendum he drew the same conclusion for 2019. He did not assess the father’s income for 2019 for which the father is also claiming child support arrears.

14The father argued that while his income has increased marginally since the issuance of the Final Order, the mother’s income has increased by over $30,000. For this reason, he sought retroactive offset Guidelines child support from the mother in the amount of $15,837, for the period of July 1, 2019, to March 31, 2022.

15The mother contests the accuracy of the father’s income. She argues that the father relied on his business to pay for a large number of personal expenses which should be attributed to his income. Furthermore, the father deliberately underpaid himself to minimize his income for child support purposes. She argues the father’s annual income should be imputed in the range of $125,000 to $135,000. Unlike the father, the mother retained an expert, Rick Evans, to not only critique Expert Casselman’s analysis, but to assess the accuracy of the father’s self-reported income from his business for the years 2016 to 2021, and in accordance with the Guidelines. As discussed below, based on a review of Rockform and Mr. Leal’s financial records, Expert Evans opines that Mr. Leal’s Guidelines income for child support is considerably higher than $65,000.

16The starting point for determining income for the purposes of child support is the payor’s line 150 income: s. 16 Guidelines. This amount can be adjusted to allow for adjustments in the payor’s pattern of income and moneys made available to the payor as shareholder, director or officer in a corporation: ss. 17 and 18 Guidelines. In addition, a court is allowed to impute income in a number of circumstances, including where a payor has deducted personal expenses from his or her business: s. 19 Guidelines. A reasonable expense deduction in family court s not governed by whether such deductions are permitted by the Income Tax Act, R.S.C., 1985, c.1 (5th Supp).

17Sections 16 to 19 of the Guidelines state as follows:

Calculation of annual income

16 Subject to sections 17 to 20, a spouse’s annual income is determined using the sources of income set out under the heading “Total income” in the T1 General form issued by the Canada Revenue Agency and is adjusted in accordance with Schedule III.

Pattern of income

17 (1) If the court is of the opinion that the determination of a spouse’s annual income under section 16 would not be the fairest determination of that income, the court may have regard to the spouse’s income over the last three years and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of a non-recurring amount during those years.

Non-recurring losses

(2) Where a spouse has incurred a non-recurring capital or business investment loss, the court may, if it is of the opinion that the determination of the spouse’s annual income under section 16 would not provide the fairest determination of the annual income, choose not to apply sections 6 and 7 of Schedule III, and adjust the amount of the loss, including related expenses and carrying charges and interest expenses, to arrive at such amount as the court considers appropriate.

Shareholder, director or officer

18 (1) Where a spouse is a shareholder, director or officer of a corporation and the court is of the opinion that the amount of the spouse’s annual income as determined under section 16 does not fairly reflect all the money available to the spouse for the payment of child support, the court may consider the situations described in section 17 and determine the spouse’s annual income to include

(a) all or part of the pre-tax income of the corporation, and of any corporation that is related to that corporation, for the most recent taxation year; or

(b) an amount commensurate with the services that the spouse provides to the corporation, provided that the amount does not exceed the corporation’s pre-tax income.

Adjustment to corporation’s pre-tax income

(2) In determining the pre-tax income of a corporation for the purposes of subsection (1), all amounts paid by the corporation as salaries, wages or management fees, or other payments or benefits, to or on behalf of persons with whom the corporation does not deal at arm’s length must be added to the pre-tax income, unless the spouse establishes that the payments were reasonable in the circumstances.

Imputing income

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

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

(b) the spouse is exempt from paying federal or provincial income tax;

(c) the spouse lives in a country that has effective rates of income tax that are significantly lower than those in Canada;

(d) it appears that income has been diverted which would affect the level of child support to be determined under these Guidelines;

(e) the spouse’s property is not reasonably utilized to generate income;

(f) the spouse has failed to provide income information when under a legal obligation to do so;

(g) the spouse unreasonably deducts expenses from income;

(h) the spouse derives a significant portion of income from dividends, capital gains or other sources that are taxed at a lower rate than employment or business income or that are exempt from tax; and

(i) the spouse is a beneficiary under a trust and is or will be in receipt of income or other benefits from the trust.

Reasonableness of expenses

(2) For the purpose of paragraph (1)(g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act.

18Upon review of the evidence filed, including the expert evidence, I find that additional income earned through Rockform should be imputed to the father’s personal income.

19The father argues that Expert Casselman has concluded that his income for child support is accurate based on an assessment of Rockport and the father materials. Expert Casselman concludes that the father’s annual income for support purposes is his reported income plus adding back 10% of his truck expenses, 25% of his office expenses and 25% of his phone expenses or $65,000.00. I respectfully disagree.

20As pointed out by the mother’s expert, there are three general shortcomings in Expert Casselman’s net worth analysis. First, Expert Casselman relies solely on the father’s own reporting of assets and did not do a search of any other public records to assess his assets and thereby his true net worth. Second, Expert Casselman’s relies only on the Income Tax Act which takes into account s. 16 of the Guidelines, but does not take into account ss. 17 and 19 of the Guidelines. Third, Expert Casselman has done a limited review of Rockform’s General Ledger and the father’s personal bank statements without a further in depth analysis to discern if the father’s reporting of business expenses in the General Ledger is accurately limited to business expenses or if there are other payments made by Rockport for the father’s personal benefit. Additional critiques are discussed below.

21Rockform purchased a new F-150 for $64,867 in 2017 another truck for $13,000 in October 2018, and another car from Sami Auto Care for $12,400 in September 2021. As pointed out by Expert Evans, it is questionable whether both these trucks were required. Some of these funds could have been paid out to the father as income and thereby to assist with child support. There are also other discrepancies identified in the father’s accounts as related to equipment. For example, the father purchased a $5,000 trailer which he now says was for the business, but it was not amortized with the rest of the company’s equipment. Expert Casselman, on the other hand, does not address the reasonableness of the truck expenses or some of these equipment discrepancies. Consequently, Expert Evans added 50% of the vehicle related expenses to the father’s income.

22The mother disagrees that the father should be able to deduct the 2017 Ford-F150s interest, insurance, and amortization since the father argues that the father had no need for this brand new truck given he had a 2017 Jaguar and another vehicle for work. However, the court must respect the right of self-employed person to run their business as they see fit: Osmar v Osmar, 2000 CanLII 22530 (ON SC), 2000 OJ No 2058 at para 5. The father does provide a reasonable explanation for why the company needed a new truck, albeit no consideration was given to a second-hand one. Nonetheless, I find the approach taken by Expert Evans is reasonable and fair in these circumstances.

23Expert Evans points out that Expert Casselman failed to attribute adequate interest for the shareholder loan of roughly $90,000 taken out by the father in 2017. This amount was not included in the father’s income as it depends on a repayment schedule. The loan was only paid back to the company in August/September 2021. Expert Casselman suggests that the father’s income should be increased to account for interest on this loan, but uses an interest rate of 1%. Expert Evans states that this underestimates the value of the loan to the father. Expert Evans relies instead on the father’s marginal personal income tax rate of 43.41% which more accurately reflects the value of the loan. In other words, if the father would have paid for the vehicle personally, he would have paid for it using after tax-dollars. I find the interest on the shareholder loan should be imputed to the father’s income based on Expert Evans calculation as set out in Table 2 below.

24Finally, for those personal expenses that the father did identify, Expert Evans claims that the father’s expert did not gross up the interest benefit to the father in his income in accordance with the s. 19 of the Guidelines and relied simply on the Income Tax Act.

25Expert Casselman’s failure to analyze the father’s personal expenses under the Guidelines has the effect of underestimating the full value to the father of the benefit from these personal expenses. Consequently, Expert Evans grossed up the father’s identified personal expenses in accordance with the father’s marginal tax rate of 43.41% to determine the amount of employment income would have been necessary for the father to earn to retain the same after -tax income. These identified personal expenses were professional fees, truck expenses and amortization, insurance, office expenses, and travel and entertainment expenses: Evans Expert Report, at paras 44 to 46 and Exhibit 4 (Summary of Personal expenditures). Furthermore, Expert Evans points out that Canada Revenue Agency only permits a 50% deduction for a company’s meal and entertainment expenses. As a result of this gross-up and upon adding the interest on the shareholder loan, Expert Evans estimates the father’s income for child support to be as follows:

Table 2

Evans’ Calculation of Jose’s Income (Exhibit 1)	2021	2020	2019	2018	2017	2016
Jose Leal’s Line 150/15000	$62,400	$60,250	$50,400	$55,200	$55,000	$60,000
Pre-tax corp. income					$8,667
Personal benefit after grossing-up	$48,033	$46,932	$56,276	$48,793	$29,953	$31,948
Interest on shareholder loans after grossing-up	$3,022	$5,531	$7,881	$7,475	$3,287	$300
Income for child support	$122,000	$112,712	$114,557	$111,467	$88,739	$92,247

26Expert Evans income calculation is based on grossed up amounts of only those personal expenses identified by the father in Rockform’s General Ledger and Financial Statements. As explained by the mother’s counsel, Expert Evans was not requested to review Rockform’s bank statements to verify other possible personal expenditures as this would have been a costly exercise. It may be the reason why the father did not ask his own expert to do the same.

27Nonetheless, the mother and her counsel did review the Rockform’s bank statements and identified a large number of personal expenses that the father has not been able to account or provide receipts for. On the basis of these additional personal expenses and for several other reasons discussed below, the mother argues the father’s income should be imputed over and above the calculation by Expert Evans. I agree for the following reasons:

28First, the father suggested that he did not use Rockform’s business account for personal expenses. The father initially alleged that he only used his business account for three withdrawals that were personal in nature: the purchase of a Jaguar in 2017 and payments to cover child care expenses in November 2020 and January 2021. However, the mother and her counsel identified a significant number of personal expenses, including cash withdrawals, from Rockform’s bank account between 2018 and 2021 that were either not recorded or if recorded, undervalued in the company’s General Ledger (“GL”) or Financial Statements on which the father’s expert Mr. Casselman relied. These expenses are outlined in the mother’s factum at pages 11 to 22. They include, but are not limited to, restaurant meals, vehicle and motorcycle repairs, gas, snow removal, dermatology dental fees, home repairs, CHEO parking, purchase of a trailer, purchases at Tangier Outlets, child care, clothes for company advertising (undervalued), personal property taxes, cigarettes, and dental expenses.

29Not only are many of these personal expenses not accounted for by the father, but it is clear that they are either not accurately in the GL or undervalued in the GL. For example, Rockform pays an unusually high amount for food and entertainment that is characterized as “travel” on Rockform’s financial statement. The father claims he is a good employer and purchases “water, oranges, and Gatorade” for his employees and “business meetings are held at Wild Wings. However, in 2018 alone there are $631.48 in restaurant costs in the Rockland Bank Statement for meals at Moxies, Baton Rouge, and other establishments but only $198.42 is recorded in the GL. The mothers states she is well aware from her eight years living with the father that he would take the family out to restaurants and use the Rockform debit card to pay for meals. The same situation arises with other categories of expenses such as motor vehicles expenses and repairs where the Rockform bank statement show a larger amount of expenditures for these items than that which is recorded in the GL.

30When confronted with these suggested personal expenses, the father acknowledged in his Reply Affidavit that there were some additional expenditures from his business account such as a trip to Niagara falls with the children and gas that he had not accounted for. The father also provided an explanation for some of the vehicle purchases and the rates at which they have been amortized by the company as well as for some of the discrepancies in the purchase of advertisements. However, I find the father did not provide adequate explanations for whether the large number of expenses identified by the mother were in fact personal or business expenses.

31The issue of these unreported personal expenses is not addressed by the father’s expert because as already indicated, Expert Casselman’s analysis was limited to a review of the company’s General Ledger and Financial Statements. It did not include a detailed review of Rockform’s bank statements and business receipts. Had it been done, Expert Casselman would have been able to question and address with the father, as he did with the truck, office, and telephone expenses, whether there were addition personal expenses from the company that should be attributed to the father’s income.

32Furthermore, the father was unable to provide receipts for the company’s expenses which could assist with two issues: first, whether the expenses are reasonable business deductions or in fact, personal expenses; and second, whether Rockform’s “Purchases” are related to unreported income. As pointed out by Expert Evans, Rockform has an unusually high number of “Purchases” for a company that only supplies labour. The father was only able to provide 12 receipts of company expenses over a span of five years. His explanation is that in March of 2021, his basement flooded because of a sub-pump back up. Consequently, Rockform’s financial information and receipts which were located in the basement were ruined. However, the father did not provide this explanation in his first two affidavits. It also does not explain why he has only provided 2 receipts for April 2021 forward. As stated in Lafazanidis v. Lafazanidi, 2020 ONSC 5496 at paras 11-13, the court may draw an adverse inference against a payor who fails to provide receipts to substantiate income and expenses. I draw an adverse inference in this case.

33Second, despite the father’s statement that he does not receive cash income, the mother has identified many unexplained deposits to his account that suggest there were in fact cash payments. The mother identifies a cash payment on September 18, 2018, from Russo Contracting of $3,955 and from Mworldpay on April 20, 2021 for $1,000. She also identifies at para 28 of the mother’s factum many cash deposits to both his personal and business account between November 2017 and September 2019. In addition, his own advertisements for the company states that they accept cash and unreported income. The mother also attests that during their marriage, the father would routinely solicit side jobs for home foundations or concrete floors for garages or sheds and was able to obtain such regularly in around Kemptville area. Given the cash deposits have not been explained, one can reasonably infer the father’s practice of soliciting side jobs likely continued after separation. This is also consistent with Rockform’s advertising which maintains it instals cement foundations, pads, and concrete forming and accepts PayPal, gift cards and cheques. The father argues this advertising is now dated.

34Finally, the mother argues that since separation, the father has minimized his income for child support purposes. I would agree. The father has not provided a clear explanation for why he continues to pay himself $60,000/year when one, his gross revenues have increased substantially in some years, and two, he is the manager of the business with significant responsibilities but pays himself the same salary as his employees. Moreover, the father’s employees collect EI and therefore earn more than him annually. Furthermore, in 2015, the year before the parties’ separation, the father generously paid himself over $100,000 when the company earned $500,000, whereas and in 2017 and 2018, when Rockport had even higher gross earnings than 2015, he only paid himself between $50,000 and $55,000.

35The father explains that his mother who he resided with during the relevant years has assisted him in paying back his shareholder loan and has made other gifts totalling $253,000. If the mother was able to loan him the money, it is questionable why the father has resorted to using shareholder loan to purchase the 2017 Jaguar rather than directly borrowing the money from his mother which would have allowed him to have those company funds available for personal income and thereby child support. More importantly, the mother relied on the father’s claim that his business income was declining and agreed to set his income at $65,000 for child support purposes for the 2018 Final Order notwithstanding that in 2017 the father was able to borrow $90,000 from his business for this vehicle purchase.

36While self-employed business people are entitled to rely on their businesses for personal expenses, the court must be mindful that the business is not used to shield personal income so as to undermine child support obligations.

37Furthermore, the parties were required to provide financial disclosure annually for the purposes of assessing child support. In his affidavit of December 28, 2016, the father represented that his corporate revenues had decreased by 50% from 2015. Consequently, the parties relied on the father’s $60,000 income of 2016 for the purposes of calculating child support for the Final Order. It is clear looking back that the Rockland’s gross revenues did indeed go down from approximately $515,000 to $335,000 from 2014 to 2015 and then remained at approximately $330,000 for 2016. However, when the father’s corporate revenues increased back to over $500,000 for 2017 and 2018, the father did not disclose this information to the mother. While he continued to pay himself approximately $55,000, the disclosure of Rockform’s earnings would have alerted the mother to question the father about his personal income and revisiting child support given the Final Order had been made on a good faith basis and acceptance by the mother that Rockform’s revenues were declining. As stated recently by the Supreme Court of Canada in Colucci v Colucci, 2021 SCC 24 at paras 128 and 129, a party cannot expect a court to award relief that prejudices the recipient and his children while shielding material information and documentation from the court and reception. Recipients should not be expected to hire forensic accountants or investigators to uncover the financial information.

38The court has full discretion to consider whether child support should be above or below the table amounts: s. 9(c) Guidelines. In this case, the parties had radically different expenses for the children. The father resided with his mother in a mortgage free home with no car payments. The mother points out that he had surplus funds to make monthly payments on a Sea doo, purchase vehicles, ATVs, a boat, as well as a large deck costing $5,000 which he installed around his house in 2021. The mother, on the other hand, is a salaried employee with both mortgage and car payments. Her monthly expenses for the children are $3,303.50/month and $2,853/month without childcare. The father’s monthly costs for the children were at $1,160 per month.

39For these reasons, I find that on a balance of probabilities, the father did have additional personal expenses and unreported income that were not accounted for in Rockform’s General Ledger in the years 2019 to 2021 which should be imputed to his personal income. I find the mother has provided sufficient evidence to seek imputation on a prima facie basis and the father has failed to rebut that imputation is required: Passfield v Passfield, 2019 ONSC 679, at paras. 46-47 citing from the Ontario Court of Appeal in Homsi v Zaya, 2009 ONCA 322, at para 28.

40As explained by Justice Aston in Osmar at para 5, there is a large body of case law on the interpretation of s. 19 of the Guidelines, not all of which his consistent. Hence, judicial discretion makes the determination of income in this area more of an art than a science. This was further explained by Justice Chappel in Kinsella v. Mills, 2020 ONSC 4785, 2020 CarswellOnt 12428 at para 167:

…The process of imputing income is not an exact science, particularly when the evidence before the court is imprecise or incomplete (Valley, at para. 10). In Korman, at para 51, the Ontario Court of Appeal held that the court may impute income to a spouse in excess of their presumptive section 16 income where the imputed amount is supported by the evidence, and is consistent with the Guidelines objectives of establishing fair support based on the financial means of the parties "in an objective manner that reduces conflict, ensures consistency and encourages resolution." The overall goal is to determine a figure that fairly reflects the parties financial circumstances….

41In this case, having considered the totality of the evidence, including the two expert reports, I find that a fair and reasonable imputation of the father’s income for child support purposes is $125,000/year for the years 2019 to 2021. Applying the set-off under the Guidelines, there will be an order that the father owes the mother retroactive child support arrears in the total amount of $10,079 for the period of July 2019 to March 30, 2022 calculated as follows:

Table 3

	2022	2021	2020	2019
Mother’s income $	106,455 (2021 income)	106,455	97,232	89,257
Father’s income imputed at $125k	125,000	125,000	125,000	125,000
Retroactive child support owed under set-off $	226 x 3 = 678	226 x 12 months = 2,712	339 x 12 months = 4068	436 = 2616 July to Dec 2019 only
Total:				$10,079

Issue 2: Are there s. 7 expense arrears?

42On August 19, 2020, the father suggested to the mother that he enroll the kids for before and after school care which she agreed to do even though she herself did not require it because she was working remotely from home. The father also requested that the children have care for PD days and March break. The children were registered and the father paid for the entirety of the costs totaling $3,340. The father seeks the mother’s 50% contribution as per the terms of the Final Order.

43On September 30, 2021, the mother advised the father she was trying to register A.L. for childcare but that it was full. The father expressed concern about not having care because it would cut into his workday. The mother managed to register A.L. by October 1, 2021, but then found out that there was no space for J.L. According to the mother, the father grumbled again that without care he would have to rearrange his work schedule and that this would affect his work output. However, he arranged to have his own mother care for the kids after school. The mother continued to incur the expense even though the A.L. appeared to be attending minimally. The father argues he should not be responsible for an expense neither of the parties ended up using. In contrast, the mother argues the father should pay for the entire expense as she only registered A.L. because of the father’s request. She also seeks reimbursement for childcare that she paid for on a PD Day on December 3, 2021,

44The Final Order states that each party will contribute to s. 7 expenses equally which includes daycare. Upon reading the parental exchange, it is clear the parties were not able to communicate in a timely and effective manner on this issue and the children were registered for care. If there was an agreement that only one parent should pay for the cost, it should have been clearly stipulated. I find it is fair and reasonable for the costs of daycare for 2020 and 2021 as well as care for any PD Days or school holidays be shared equally by the parents and there will be an order to that effect accordingly. Counsel will specify the amounts owed by each party to the other in the draft Order.

45The father is agreeable to paying for his portion of the dental expenses that were not covered by insurance for J.L.’s tooth extraction. There will be an order that the father shall pay the mother $263.50.

46Counsel for the mother shall prepare a draft Order consistent with this decision for my review and signature.

Costs

47The mother is the successful party on this motion. If the parties are not able to settle the issue of costs, submissions can be filed in writing. They shall not exceed two pages, exclusive of the Bills of Costs and Offers to Settle. The mother shall file her submissions by July 11, 2022, the father by July 25, 2022, and the mother will have until August 2, 2022 to reply. Please email the submissions to scj.assistants@ontario.ca and to my attention.

Somji J.