ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TRISHA DEE ANN TULLOCH
Applicant
– and –
BOMANI KHEMET
Respondent
Self-Represented, Applicant
Howard Wolch, for the Respondent
Heard: March 17, 18, 19, 20, 21, April 24, April 25, June 2, 2025
reasons for judgment
A.P. RAMSAY, J
I. Overview.. 2
II. Issues. 3
III. Applicant’s Request for Sealing Order. 3
IV. Analysis. 5
A. Law re child support 5
B. Determination of applicant mother’s income. 6
i. Should income be imputed to the applicant?. 7
ii. Income should not be imputed to the applicant for non-disclosure. 18
iii. Applicant’s income calculated for support purposes. 21
iv. Is the respondent underemployed?. 22
v. Should income be imputed to the respondent because of loans from family members?. 23
V. Quantum of child support 26
i. Section 7 Expenses. 28
VI. Procedural fairness. 29
VII. Costs. 32
Overview
1The parties were together for 18 years. They started living together in 2001, while both were pursuing their degrees. They got married in July 2003. The applicant became a medical doctor, the respondent a professor. They have two children together, the eldest, a son, now 19, is in university and the youngest, a daughter, is in grade school.
2In January 2019, the respondent left the matrimonial home. Before the commencement of the trial, the parties disputed the date of separation. The applicant had asserted the date was October 2019; the respondent had claimed it was January 2019. At the trial, the applicant agreed to the respondent’s date of separation.
3The application before me was commenced by the application seeking various relief. Neither party included a copy of the Application in the Trial Record, but based on the Answer, and the partial resolution of issues, claims were advanced under the Divorce Act for spousal support, child support, parenting, and for an equalization of family property under the Family Law Act: R.S.C. 1985, c 3 (2nd Supp); R.S.O. 1990, c. F.3.
4The parties participated in a mediation in February 2023, and managed to resolve the issues of parenting, equalization, and spousal support on a final basis. They resolved section 7 special and extraordinary expenses on a temporary and without prejudice basis. Although they signed Minutes of Settlement on November 20, 2023. The terms of the settlement have yet to be incorporated into a court order.
5The parties have a had a shared parenting arrangement since shortly after the separation, now memorialized in the Minutes. Both parties agree that neither of them has paid table child support.
6The sole issue left unresolved between the parties is child support. The applicant asserts that after the respondent left the matrimonial home, she alone shouldered the financial burden for the children’s housing and living expenses. She argues that income should be imputed to the respondent on the basis that he is underemployed, has failed to provide financial disclosure, has not provided proper disclosure regarding alleged loans from his family, and has travelled extensively.
7Both parties wish to impute income to the other. The applicant is seeking child support retroactive to January 2019, ongoing child support from the respondent, and order requiring the respondent to share the section 7 expenses. The applicant has earned income personally and though her medical professional corporation. She has also filed a Division 1 proposal under the Bankruptcy and Insolvency Act, R.S.C, 1985, c. B-3, which resulted in significant tax liability to the federal government being reduced . She blames some of the family’s finances on the respondent’s failure to shoulder his share of a family debt and the delayed billing during the pandemic.
8In her Closing, the applicant sought “judicial endorsement” of the Minutes. It is not clear the nature of the relief being sought. No formal motion is before me with respect to the applicant’s request and I decline to make any order with respect to the Minutes.
9The applicant has also requested a sealing order, which is denied, for the reasons below.
10The respondent also seeks to impute income to the applicant. The respondent says that the applicant is intentionally underemployed. In his Answer, he alleges that the applicant has purposefully reduced her professional time to reduce her support obligations. He says that the applicant’s line 150 income does not reflect her true income for child support purpose because it does not include her pre-tax income from her medical professional corporation, income derived from her tax liability to the government being forgiven, and because she has deducted non-business expenses. The respondent argues that the applicant has failed to disclose financial information.
11Despite the fact that the only issue before the court is child support, the respondent repeatedly raised issues which were already resolved and/or which were not relevant to the substantive issues to be determined including: the sale of the parties’ matrimonial home (which occurred before they separated); parenting (which pre-date the parties’ final settlement on the issue); and a failed mediation. The respondent asked that the court draw an adverse inference against the applicant because of non-disclosure of documents and information.
I. Issues
12I must determine the parties’ income for the purpose of child support including whether income should be imputed to either party and, if so, on what basis.
13I must also determine whether either party must pay retroactive and/or prospective child support, including section 7 expenses.
II. Applicant’s Request for Sealing Order
14In her Closing Submissions, the applicant requested a sealing order on the basis that she is representing herself. The respondent takes no position regarding the request.
15The request is denied for the reasons which follow.
16The applicant has not filed any motion to request a sealing order.
17There is a presumption that court proceedings are open to the public. Court openness is protected by the constitutional entrenched guarantee of freedom of expression and is essential to our democracy: Sherman Estate v. Donovan, 2021 SCC 25, [2021] 2 S.C.R. 75, at para. 1.
18In Ontario, where a party seeks a sealing order, the procedure under Section F of Part V of the Consolidated Provincial Practice Direction of the Ontario Superior Court of Justice, entitled “Publication Bans” must be followed: see, Cao v. Monkhouse Law Professional Corporation, 2021 ONSC 7894 (Div. Ct.). Under this section, a party seeking a sealing order is required to give notice to the media as established by the jurisprudence.
19However, the court has discretion to dispense with the requirement to give notice. In Canadian Broadcasting Corp. v. Manitoba, 2021 SCC 33, [2021] 2 S.C.R., at para. 50 the court stated:
To be clear, limits on court openness, such as a publication ban, can be made without prior notice to the media. Given the importance of the open court principle and the role of the media in informing the public about the activities of courts, it may generally be appropriate to give prior notice to the media, in addition to those persons who would be directly affected by the publication ban or sealing order, when seeking a limit on court openness [references omitted]. But whether and when this notice should be given is ultimately a matter within the discretion of the relevant court (Dagenais, at p. 869; M. (A.), at para. 5). I agree with the submissions of the attorneys general of British Columbia and Ontario that the circumstances in which orders limiting court openness are made vary and that courts have the requisite discretionary authority to ensure justice is served in each individual case. [Emphasis added].
20In Sherman, the Supreme Court of Canada made it clear that where a discretionary court order limiting the constitutionally protected openness of the court is sought, the moving party must demonstrate, as a threshold requirement, that openness presents a serious risk to a competing interest of public importance. At para. 38, Kasirer J. re-cast the test for discretionary limits on presumptive court openness as had been set out in Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 S.C.R. 522. The moving party must establish the following three prerequisites:
i. court openness poses a serious risk to an important public interest;
ii. the sealing order is necessary to prevent this serious risk to the identified interest because reasonably alternative measures will not prevent this risk; and
iii. as a matter of proportionality, the benefits of the order outweigh its negative effects.
21In my view, the applicant fails at the first stage of the test. The fact that she is representing herself is not a sufficient basis to restrict the openness of the court. Family Law proceedings are peopled with self-represented litigants. The presumption of the openness of the court may be limited only in exceptional circumstances where there is a demonstrated and serious risk to an important competing public interest: Sherman, at para. 4. Any such restrictions must be no greater than necessary to protect the competing public interest: Sherman, at para. 4.
22Since the applicant has failed to meet the first part of the test, I need not consider the other prerequisites. However, I note that the only remaining issues between the parties deal with child support, and the evidence relates to the parties’ finances, which is not unusual in many family law proceedings. To the extent that the orders sought in this trial relates to children, one of whom is a minor, with several years of schooling ahead of her, I see no reason why the children’s names cannot be anonymized.
23In my view, there is no evidentiary basis for a sealing order, nor an alternative to a sealing order, be it anonymization or redaction of any part of the record.
III. Analysis
A. Law re child support
24The applicant seeks a final order for retroactive and ongoing set-off-table child support for the children of the marriage, K.D.K., now 19 years old, and K.S.K., who is now 10 years old. Both the applicant and the respondent rely on ss. 15.1 (1)-(2) of the Divorce Act and sections 31 and 33 (7) Children's Law Reform Act in support of their position regarding child support: R.S.O. 1990, c. C.12.
25In my view, since the collateral relief for child support was advanced in the context of the application for divorce, the Divorce Act is paramount.
26The Supreme Court of Canada emphasized in Michel v. Graydon that “the purpose and promise of child support is to protect the financial entitlements due to children by their parents”: 2020 SCC 24, [2020] 2 S.C.R. 763, at para. 38. Having regard for the importance of this purpose, the law of child support calls for a “fair, large and liberal construction and interpretation as best ensures the attainment of its objects”: Chartier v. Chartier, 1999 707 (SCC), [1999] 1 S.C.R. 242, at para. 32; Michel, at para. 40.
27Under s. 15.1(1) of the Divorce Act, on application by either parent, the court may make an order for child support to be paid by either or both spouses for children of the marriage. Any order for child support must be made in accordance with the applicable child support guidelines: at s. 15.1(3).
28Section 3 of the Federal Child Support Guidelines, notes that unless it provides otherwise in the Guidelines, the amount of child support payable for children under the age of majority is the amount specified in the applicable table and the amount determined under s. 7 of the Guidelines: SOR/97-175.
29There is a presumption in favour of the using the child support guideline table amount and the onus of showing that this approach is inappropriate is on the party so claiming: Lewi v. Lewi, 2006 15446 (ON CA), [2006] 80 O.R. 321 (Ont. C.A.), citing Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250.
30The table amount is usually not appropriate if the child lives away from home or has significant assets and earnings: Arnold v. Washburn, 2000 22732 (ON SC), [2000] 10 R.F.L. (5th) 1.
B. Determination of applicant mother’s income
31The applicant is pediatrician and assistant professor at the Faculty of Medicine at the University of Toronto. She worked independently from 2012 until the spring of 2023, when she obtained a job at the Hospital for Sick Children as a salaried employee.
32For the past two years, the applicant’s primary source of income has been as a salaried physician employed with The Hospital for Sick Children. She receives a modest income as paediatric consultant for Centre for Addiction and Mental Health. Prior to 2022, she owned a professional corporation, Dr. T. Tulloch Medicine Professional Corporation. Prior to separation, the applicant earned income through a professional corporation and other contract work. She owned 100% of the common shares of her professional corporation, which was incorporated in 2016. The respondent and the children owned the outstanding preferred shares.
33The parties dispute what the applicant’s income should be for support purposes. In her Closing Submissions, the applicant rejects the respondent’s assertion that she is underemployed and argues that in the past she was overemployed. She argues that her income for child support purposes should be based on the “Before Attribution of Pre-tax Corporate Income” scenarios in the respondent’s Expert Report. In her Closing Submissions, she asked that the court determine her income, as summarized below, which, apart for 2024 (which was not dealt with by the respondent’s expert), are the figures arrived at by his expert summarized in Schedule 1 to the expert’s report. The figures are as follows:
2019: $236,000
2020: $186,000
2021: $264,000
2022: $169,000
2023: $164,000
2024: $195,000
34In his closing submissions, the respondent argues that income should be imputed to the applicant based on $252,000 base per year from 2022 and apportioning “tax benefits over five years”, for the following imputed income between 2019 to 2020:
2019: $289,400
2020: $239,400
2021: $317,400
2022: $305,400
2023: $305,400
2024: $252,400
2025: $252,400
i. Should income be imputed to the applicant?
35As indicated above, both sides are asking the court to impute income to the other. I will first address the respondent’s request.
36The respondent asserts that the court should impute income to the applicant on several basis, namely that: (i) she is intentionally underemployed; (ii) her income should include her pre-tax corporate income; (iii) she unreasonably deducted expenses; and that (iv) her income should be grossed up to reflect “tax credits” resulting from the forgiveness of her tax debt to the Canada Revenue Agency following her consumer proposal; and, because she failed to make financial disclosure. He asks that the court make an adverse inference against her regarding the last mentioned.
37The applicant argues that she was effectively overemployed in the past. She has not articulated a clear position regarding the forgiven tax debts, but upon being asked by the court during closing submissions, appeared to agree with the applicant that if it is added, that it should be one fifth per year. She asks that her income for support purposes be based on her income before attribution of her pre-tax corporate income. The applicant says that the respondent has advanced a misleading narrative regarding nondisclosure and underemployment which has prolonged the litigation.
38Imputation is one method by which a court gives effect to the joint and ongoing obligation of parents to support their children. The three-part test for the imputation of income is set out in Drygala v. Pauli, 2002 41868 (ON CA), [2002] 61 O.R. (3d) 711, at para. 23, as follows:
i. Is the spouse intentionally underemployed or unemployed;
ii. If so, is the intentional or unemployment required by virtue of his or her reasonable educational needs, the needs of the child, or reasonable health needs;
iii. If the answer to (ii) is negative, the court must decide whether to exercise its discretion to impute income, and if so, determine the amount to be imputed in the circumstances.
39The regulatory mechanism for imputing income is found in s. 19(1) of the Federal Child Support Guidelines. The court may impute income to a spouse in such amount as it considers appropriate in the circumstances where, for example, the court finds that the “the spouse is intentionally under-employed or unemployed.” Section 19(1) enumerates a non-exclusive list of circumstances in which the court may impute income.
40The provision states:
- (1) The court may impute such amount of income to a spouse as it considers appropriate in the circumstances, which circumstances include,
(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.
41Line 150 is the presumptive income, restricting "income" to income that is subject to taxation: Bak v. Dobell, 2007 ONCA 304, 86 O.R. (3d) 196, at para. 30.
42The principles that govern the imputation of income in a child support case were described by Madsen J. in Evans v. Evans, 2023 ONSC 3919, at para. 77, and include the following:
Section 19(1) of the Child Support Guidelines provides that the court may impute income to a parent in appropriate circumstances. Those circumstances include but are not limited to circumstances where the spouse is intentionally unemployed or underemployed, other than as required by the needs of the child, or the reasonable health or educational needs of the spouse: see s. 19(1)(a). Other circumstances include where the parent failed to provide income information when under a legal duty to do so: see s. 19(1)(f).
There is no need to find an intention to evade support obligations to find that a spouse is intentionally underemployed or unemployed. That a spouse is earning less than they are capable of earning will suffice.
Where a party chooses to pursue self-employment, the court will examine whether this is a reasonable choice in the circumstances: see Smith v. Smith, 2012 ONSC 1116, at para. 81. A parent cannot pursue an improvident career path at the expense of the child: see Evans v. Gravely (2000), 15 R.F.L. (5th) 74 (Ont. S.C.J.), at para. 11. See also Tillmans v. Tillmans, 2013 ONSC 5500, at para. 99.
Parents can take jobs which generate less income as long as the decision is reasonable. However, a support payor cannot select a job merely because it suits his or her purposes. When an employment decision results in a significant reduction of child support, it must be justified in a compelling way: see Riel v. Holland (2003), 2003 3433 (ON CA), 177 O.A.C. 162 (C.A.), at para. 23; B.(G.T.) v. B.(Z.B.), 2014 ONCJ 382, at para. 66; Rilli v. Rilli, 2006 34451, at paras. 18-26.
43The Ontario Court of Appeal has noted that the imputation of income is one method whereby the court gives effect to the joint and ongoing obligation of parents to support their children. The court noted that
44The onus is on the person seeking an imputation of income to establish a prima facie case. The person requesting an imputation of income must establish an evidentiary basis upon which this finding can be made: Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17, at para. 28; Drygala. The onus then shifts to the payor to show that they acted reasonably, which must be justified in a compelling way: see Riel v. Holland, 2003 3433 (ON CA), [2003], 67 O.R. (3d) 417 (Ont. C.A.), at para. 23.
Is the applicant intentionally under employed?
45It is well established that a parent should earn what they can earn to meet their legal obligation: Drygala, at para. 32.
46For the reasons below, the respondent has not discharged the onus of establishing that the applicant should earn more than she is currently earning as a full-time salaried pediatrician at Sick Kids.
47The factors to be considered include the payor’s age, education, experience, skills, and health, as well as the payor’s past earning history, the payor’s employment history, and the amount of income the payor could earn if they worked to capacity: Lawson v. Lawson, 2006 26573 (ON CA), [2006], 81 O.R. (3d) 321 (Ont. C.A.), at para. 36; Drygala, at para. 45.
48The applicant is in her late forties. There is no indication that she has any health issues. She was self-employed as a medical doctor for several years. Between 2015 to 2018, the applicant was bringing in the lion share of the income, working three to four jobs, which included being self-employed; the applicant also did clinical work at a community-based hospital. She also did contract work for CAMH. The applicant argues that she was working upwards of 80 hours a week at one point. Her work involved a lot of travel outside of Toronto and to the wider Greater Toronto Area. She was the main breadwinner when the respondent was pursuing his doctorate, then later, as the respondent was establishing his career as a professor.
49Amid the pandemic, the applicant worked in an acute care hospital. She says that she juggled her parenting duties caused by the parties’ separation at the same time. The highest income that the applicant reported is $316,000 in 2016. At the time, the respondent had already made the decision to pursue his doctorate. They had two children at that time, the youngest, their daughter, turned one year old that year.
50Since the parties separated, the applicant no longer has a professional corporation. Since 2023, the applicant has been making approximately $194,000, from her salaried employment as a paediatrician with the hospital and her consulting work. The respondent’s expert, Melanie Russell, testified as to the applicant’s income from 2016 to 2023.
51The respondent retained Melanie Russell as a litigation expert. Ms. Russell authored a report dated March 10, 2025, calculating the applicant’s income for support purposes from 2016 to 2023. Ms. Russell obtained designations as a Chartered Accountant/Chartered Professional Accountant, and Chartered Business Valuator. She has received several certifications including being as a Certified Fraud Examiner and Certified Fraud Examiners, and an accredited in Business Valuation.
52The applicant did not challenge Ms. Russell’s qualifications. I accepted Ms. Russell as qualified to provide opinion evidence to the court on the applicant’s income. Based on Ms. Russell’s evidence, the applicant’s income exceeded the $300,000 threshold only once, and that is 2016, in the three years leading up to their separation. According to Ms. Russell’s evidence, the applicant’s income ranged between $223,000 and $236,000 in those years. At paragraph 8 of her report, Ms. Russell provided the following summary of the applicant’s income between 2016 to 2023:
53Ms. Russell testified that there were only three years whereby the applicant’s income, before attribution of pre-tax corporate income, differs from her income after attributing her pre-tax corporate income, that is, 2017 ($235,000 versus $225,000); 2018 ($257,000 versus $223,000), and 2019 ($137,000 versus $236,000). While the 2017 and 2018 tax years are relevant to show the applicant’s history earnings, a factor to be considered by the court in determining whether income should be imputed, only 2019 (the year the parties separated) is relevant to the question of when entitlement to child support, if any, would have crystalized.
54I must reject the respondent’s argument that the court should impute an income of $325,000 annually to the applicant, or the amounts set out in his Closing Submissions. Even accepting his own expert’s evidence, at its highest, with the attributions of pre-tax corporate income, deductions of the expenses recorded by the professional corporation and corresponding gross up on those figures, the applicant has only exceeded the $300,000 threshold once. I also agree with the applicant that working up to 80 hours a week and the travel involved in her various contract positions effectively resulted in her being overemployed. Her evidence is uncontested regarding the amount of travel involved with her multiple positions.
55In Drygala, Gillese J.A., speaking for the court, defined the meaning of “intentional under-employment” at para. 28:
Read in context and given its ordinary meaning, “intentionally” means a voluntary act. The parent required to pay is intentionally under-employed if that parent chooses to earn less…than he or she is capable of earning.
56Since separation, the applicant continued to work full time, including doing some consulting work. In my view, it is unreasonable to expect a mother working full time, now with less flexibility because of her parental duties because of the breakdown of the marriage, to work in excess of the full-time hours as a paediatrician and other consulting work that she continues to do.
57For the reasons above, I reject the respondent’s argument that the applicant is underemployed or that her income is not reflective of her income earning capacity.
Should pre-tax income of the professional corporation be included in applicant’s income?
58The respondent also argues that the applicant’s pre-tax income corporate should be considered for the purpose of calculating her income for support. The applicant opposes the inclusion of the pre-corporate income from her medical corporation in her income.
59The court may consider pre-tax corporate income, together with line 150 income over the previous three years to determine income if the court believes the line 150 income of the payor does not adequately reflect income. Section 2(1) of the Guidelines defines “income” as “the annual income determined under sections 15 to 20.”
60Sections 15 to 20 and Schedule III of the Guidelines govern the method for determining a spouse's income for the purposes of child support. Section 16 of the Guidelines provides that a spouse's annual income, subject to sections 17 to 20, is determined by “using the sources of income set out the heading “Total income” T1 General form issued by the Canada Revenue Agency (colloquially referred to as line 150 income) and is adjusted in accordance with Schedule III.”
61In determining income for support purposes, in addition to the line 150 income, the court may consider a spouse’s pre-tax corporate income: Mason v. Mason, 2016 ONCA 725, 132 O.R. (3d) 641, at para. 120. Section 18(1) of the Guidelines s gives the court the authority to include a spouse’s pre-tax income in the calculation of the income available for support purposes if a spouse is a shareholder, director, or officer of a corporation.
62Under s. 18(1), the court may also determine the annual income to include all or part of a corporation or related corporation’s pre-tax income for the most recent taxation year if the court determines that the spouse’s annual income determined under s. 16 does not fairly reflect all the money available to the spouse for the payment of child support: s.18(1)(a), or, an amount commensurate with the services that the spouse provides to the corporation provided the amount does not exceed the corporation’s pre-tax income: s.18(1)(b). A spouse may rebut the presumption of the inclusion in income by establishing that the payments were reasonable in the circumstances: s. 18(2).
63Pre-tax corporate income is likely to be attributed to the payor, if it can be taken without seriously undermining the finances of the corporation, and if it is available to the payor or could be made available: Kendry v. Cathcart, 2001 28124 (ON SC), [2001], 14 R.F.L. (5th) 333 at para. 34; O'Neill v. O'Neill, 2007 14631 (ON SC), [2007] 39 RFL (6th) 72, at para. 88.
64I would reject the applicant’s position that the court ought not to consider her pre-tax corporate income in determining her income for child support. The applicant owns all the common shares of the medical professional corporation. She controlled the corporation. She has not provided any business reason for the retained earnings being held in any given year, in the corporation.
Did the applicant unreasonably deduct expenses for the professional corporation?
65The respondent asserts that the applicant has unreasonably deducted expenses. The respondent’s expert included all the expenses deducted by the applicant’s medical professional corporation as personal income.
66Although the applicant suggested that her obligation to pay child support be based on the figures in paragraph 8 and Schedule 1 of the Russell report, she did not address the assumptions or expenses which she attributed as business expenses, but Ms. Russell characterized as “non-business/personal expenses recorded in the MPC”, in Schedule 1 to her report.
67The respondent’s expert included the expenses in her income and grossed them up for the relevant tax years. It is not clear what the applicant’s position regarding the attribution of pre-attribution income is in response to this issue. Given the timing of the delivery of the respondent’s expert report less than two weeks before the trial, and the fact that the applicant is self-represented, I will permit her some flexibility when dealing with this issue.
68The onus to prove the validity of a deduction including carrying and interest charges and Schedule 111 deductions lies on the payor: see Pollitt v. Pollitt, 2010 ONSC 1617, 3 R.F.L. (7th) 1, at para. 128; Haras v. Camp, 2018 ONSC 3456, 12 R.F.L. (8th) 392.
69The jurisprudence recognizes that expenses related to the professional association can be deducted, and that amount would not be available as income for support purposes. Although the court may gross up a spouse’s income where significant amounts of untaxed business income are used for payment of personal expenses (Riel, at para. 36), I am not satisfied that this is the case here.
70I would reject Ms. Russell’s inclusions of expenses related to membership dues, legal, professional fees, transportation, and other office expenses for 2019, 2020, and 2021 in the applicant’s income for support purposes on the basis that they were personal expenses.
71There is a line of authority which stand for the proposition that, in the case of employees, deductions accepted by CRA are not automatically accepted as deductions from income for the purpose of determining a spouses’ income. Evidence justifying a conclusion that employment expenses qualify as a deduction pursuant to s. 8(1) of the Income Tax Act is required: see, Bentley v. Gillard-Bentley, 2013 ONSC 722 and Chase v. Chase, 2013 ONSC 5335; Haras v. Camp. On the other hand, in Picard v. Picard, 2001 CarswellOnt 2111 (Ont. S.C.J.) at para. 5, Aston J. noted that he had started from the premise that “expenses, deductions and write-offs permitted under the Income Tax Act were bona fide and proper in the absence of evidence to the contrary”. In my view, the principles gleaned from these cases apply here.
72On the evidence, I find that the applicant’s expenses were business related expenses. The applicant had an accountant who compiled her financial statements. She was re-assessed in 2020 and 2021, and in each instance her operating losses were determined to be higher, and her retained earnings were determined to be less than initially reported. I also found the applicant to be a credible witness, and note that until 2019, it was the respondent who oversaw the dealings with the accountant for the joint tax filings.
73It is noteworthy that the respondent did not isolate these expenses at trial or in his Closing Submissions.
74While I agree with the respondent’s expert that the applicant’s pre-tax corporate income ought to be included in her income, I would reject the inclusion of the expenses recorded by the medical professional corporation for 2019 to 2022.
75In 2019, Ms. Russell calculated the applicant’s income to be $236,000. I find that the expenses noted by the corporation in 2019, which amounts to approximately $65,674 should be deducted from the pre-tax corporate income. This amount includes the amount of -$22,000 recorded by the professional corporation, a reduction also made by Ms. Russell, for salary in office and general. The gross up figure in 2019 of $9,402 should therefore be deducted.
76Therefore, I find that the applicant’s income for support purpose for 2019 is $161,437. This figure includes the applicant’s income reported at line 15000 plus her pre-tax corporate income, less her expenses as identified above, less the amount of calculated by Ms. Russell as a gross up for tax purposes ($9,402). I found the applicant to be a credible witness and accept the amounts identified as reasonable and associated with the operation of her practice, especially given the respondent’s involvement with joint tax filings for many years. I have further reduced her income.
77Similarly, I accept the applicant’s expenses recorded by the professional corporation in the amount of $16,603 related to dues and membership, rent, and general office expenses, among other things, to be reasonable. In the result, I also reject Ms. Russell’s gross up of $12,431 on those figures.
78For the reasons previously stated, I find the expenses related to the medical professional corporation in the amount of $35,777 for dues & membership, rent, and other expenses to be reasonable for the 2021 year. I would reject the deduction and the gross up of $22,110. I would underline that the professional corporation had a loss in fiscal year 2021, but the respondent did not address the underlying assumptions at trial in Ms. Russell’s report.
79The applicant’s line 150 income in 2021 was $152,658. Ms. Russell concluded that the applicant’s income for 2021 for support purposes was $264,000. CRA re-assessed the applicant in 2020 and 2021. Although she initially reported retained earnings of $147,832 in 2021, after she was re-assessed, the medical professional corporation had a loss of $35,015. She had a pre-tax corporate loss in 2021. Where a corporation suffers a loss in the most recent taxation year, the court has no authority to include an amount of pre-tax corporate income: Mason, at para. 163. The respondent did not address the court’s authority to include the pre-tax corporate income to the applicant in 2021.
80I also note that in 2021, Ms. Russell included in the applicant’s income what she described as a gross up of $58,573 for an overdrawn shareholder loan account. She testified that in certain years the corporation owed the applicant money, but that was reversed in 2021, the debt disappeared. She presumed the debt would not be repaid in 2022 and that it would be wiped out by the bankruptcy, “or some other way”, then effectively the applicant has benefitted by having money taken out from the company and she was not subject to tax.
81There respondent did not elicit any evidence at trial which would support Ms. Russell’s assumptions. It is not clear to the court whether, at the time shareholder loan came into existence; there were a series of loans; and whether the applicant failed to pay them back within one year in which the loan was made. There is no evidence before the court as to whether the loan was paid back, and no evidence to indicate what happened to the loan. I am not able to speculate.
Should the applicant’s income include the forgiven debt to CRA?
82In 2023, the applicant applied for a division 1 proposal under the Bankruptcy and Insolvency Act: R.S.C., 1985, c. B-3. Under an amended proposal in 2024, the applicant agreed to pay $150,000 to her creditors.
83The respondent argues that the taxes payable to CRA by the respondent which were wiped out by her consumer proposal should be included in income. In his Closing Submissions, the respondent argued that the court has authority to gross up the applicant’s income under s. 19(1) (h) of the Guidelines “to account for the lower rate of taxes from 2019 through 2023 due to her bankruptcy.” During oral submissions, counsel for the respondent suggest that the court assign one fifth to be included in the applicant’s income.
84The respondent asks the that the amount forgiven by the consumer proposal can be added to the applicant’s income or be grossed up. It is not clear what the respondent means by his position, which appeared to evolve. He argues that the applicant received a “tax benefit” “from non-payment of CRA debt totaling $257,000 to $267,000 of tax benefit”. He has also argued that she had a “lower rate of interest”. Although the respondent referred to s. 19(1) (h) of the Guidelines which would ask the court to impute income to a spouse where the spouse derives an income from sources that “are taxed at a lower rate than employment or business income or that are exempt from tax”, the respondent has presented no evidence that the applicant was taxed at a lower rate.
85The respondent called John Delo of Farber to testify. Mr. Delo is a licensed insolvency trustee with A. Farber & Partners Inc. Mr. Delo’s involvement with the applicant’s consumer proposal was only a week, starting around the beginning of the trial. He reviewed the claims register (Exhibit 24). Mr. Delo testified that on the initial filing, the debtor “estimates” what is owed to the various creditors, and the creditors must substantiate their claim. CRA’s proven claim amounted to $253,070.88.
86Mr. Delo testified that the applicant agreed to a proposal which would result in creditors receiving a pro rata share of $150,000.
87Ms. Russell, the respondent’s expert, testified that if the applicant did not pay taxes between 2016 to 2023, her income for support purposes “would be effectively higher because she has more income available to her.” She suggested that the amount would be grossed up. I note that there was no evidence before me about the amount of tax gross-up to be applied to reflect taxes avoided on non-taxable income or income taxed at lower effective rates. Since the respondent made no submissions on the point and provided no supporting authority, I am not persuaded that the debt to CRA that was forgiven would meet the definition of income.
88The court may gross up a spouse's income before applying the Table amount in the Guides to account for differences in tax consequences between salaried employees and persons in receipt of other forms of income: see Orser v. Grant, 2000 49232 (ON SCDC), [2000] 12 R.F.L. (5th) 184; Moran v. Cook 2000 22542 (ON SC), [2000], 9 R.F.L. (5th) 352; Sarafinchin v. Sarafinchin (2000), 2000 22639 (ON SC), 189 D.L.R. (4th) 741; Manis v. Manis, [2000] O.J. No. 4539 (QL), [2000] O.T.C. 880 (S.C.J.); and Brans v. Brans (2000), 2000 22471 (ON SC), 13 R.F.L. (5th) 335 (Ont. S.C.J.). Such an approach is undertaken by the court where the court determines that the individual has arranged their affairs to pay substantially less tax on income: Orser, at para. 64).
89The authority establishes that income of a self-employed individual may be grossed up where that person arranged their affairs to pay substantially less taxes on their income: Riel, at para. 32. This is not a situation where the applicant arranged her affairs in order to pay substantially less tax. In fact, it is the very taxes owing which is the heart of the issue. The jurisprudence establishes that there should be “consistent treatment” for individuals in “similar circumstances”: Riel, at para. 35; Orser v. Grant, 2000 49232 (ON SCDC), [2000] 12 R.F.L. (5th) 184. As noted by MacPherson J.A. at para. 35 in Riel, under section 1(d) of the Guidelines, one of the objectives is "to ensure consistent treatment of spouses and children who are in similar circumstances".
90I am not satisfied that the forgiven debt is available to the applicant for child support because the tax debt is forgiven. In my view, there is a difference between paying less taxes, which may result in a person’s actual income, comparative to someone else making the same income, being more, and having that liability to pay eliminated.
91For example, not all commercial debts are included as income for tax purposes, though this is not determinative. But, the point being s. 80 of the Income Tax Act sets out the circumstances where a business settles its debt obligation for less than the face value, if certain criteria are met, the forgiven debt must be included as income by the company: R.S.C., 1985, c. 1 (5th Supp.). It is not the court’s intention to suggests that s. 80 of the ITA applies, instead, I underline that the settling of the applicant’s tax liability with CRA for less than face value was effectively a forgiveness of a debt.
92The court may also impute income to a spouse where the spouse is exempt from taxes. Again, there was no argument by the respondent in Closing Submissions as why applicant would be “exempt” from paying taxes. Neither party any submissions on this issue despite me raising the issue during the trial and inviting submissions. I note that s. 81(1) of the ITA enumerates situates in which income or other amounts received by a person would be “exempt from income” or excluded from computing the person’s income for a particular tax year. Neither party has directed the court to any authority for the provision that the forgiveness of the applicant’s tax liability is equivalent to the applicant being “taxed at a lower rate than employment or business or that she is “exempt from tax.”
93Neither party addressed whether the tax liability, forgiven by CRA, would meet the definition of “income” as defined by s. 16 of the Guidelines or, as it pertains to corporate income, s.18, nor Schedule III nor whether the applicant was “exempt” from paying taxes. The modern approach to statutory interpretation mandates that words of a provision are to be read in their grammatical sense. In Mason, Simmons J.A, speaking for the Court, reiterated the modern approach to statutory interpretation. The same in my view applies to regulation. She stated at para. 69, that:
…the words of an Act “be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, at para. 21; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at para. 26; Wilson v. British Columbia (Superintendent of Motor Vehicles), 2015 SCC 47, [2015] 3 S.C.R. 300, at para. 18; Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, 395 D.L.R. (4th) 656, at para. 27.
94The Guidelines employs pre-tax inputs to generate their ranges for support purposes: Slongo v. Slongo, 2017 ONCA 272, 137 O.R. (3d) 654, at paras. 120-21. There is no provision in either set of Guidelines for alternative "notional" approaches: Slongo, at paras. 130.
95If I am wrong, I note that there are several other reasons why I would reject the respondent’s request. The amount that CRA is to receive on a prorated basis was not established at the trial. The respondent’s expert testified that the tax liability was approximate figure being of $275,000 and the right rate would be to attribute that amount to the relevant tax year. In his Closing Submissions, the respondent indicated the amount was $257,000 to $267,000. These figures are all higher than Mr. Delo’s evidence of the CRA claim that was accepted. I am not satisfied that the respondent has established how much of the forgiven tax liability should be available for the purposes of inclusion of income. Section 18(1) permits the court to consider a gross-up to take account of the fact that a payor has paid very little tax on his income: Riel, at paras. 35-36.
96Mr. Delo testified that CRA filed a claim in the amount of $253,070.88, which the trustee admitted was valid and enforceable. Mr. Delo was not asked how much of the $150,000 CRA would receive on a prorated basis. The respondent has not provided any evidence as to the amounts that should be considered as income spread out over five years.
97I also note that the applicant’s liability to CRA included not only taxes owed, but also penalties, arrears and interest. On the evidence, the applicant had a significant tax liability, interest and penalty, already recorded before the parties separated. Based on the record, the applicant had a tax liability to CRA in 2018 totaling $56,629.81 which consisted of the taxes owed ($45,518.18), penalties ($7,282.91), arrears ($3,039.62), and interest installment ($789.10). There is no evidence before the court as to how much of the taxes that were forgiven comprised of these amounts, nor, for that matter, whether those items can also be characterized as income.
98The respondent has also not explained why the court should consider taxes which were eliminated by the proposal, but which started to accrue before the parties separated. The respondent testified that he was aware that the applicant stopped paying taxes in 2018 or 2019. Mr. Delo testified that there were three numbers listed based on different years.
99Finally, there is yet another reason which causes me to decline to include the amounts in the applicant’s income, and that is fairness and non-disclosure by the respondent. There is discretion in the court to determine an income for support purposes which is fair.
ii. Income should not be imputed to the applicant for non-disclosure
100The respondent asks that the court make an adverse inference against the applicant and impute income to her because she did not disclose documents or information.
101In response, the applicant argues that the respondent has waged a campaign to paint a misleading narrative that she has not met her disclosure obligations, has utilized court resources to repeatedly request disclosure, previously provided, and has repeatedly requested documents which do not exists.
102Under s. 19(1)(f) of the Guidelines, the court may impute income to a spouse where the spouse failed to provide income information when under a legal duty to do so. The court may draw an adverse inference where a party fails to comply with their disclosure obligations: Gray v. Rizzi, 2016 ONCA 152, 129 O.R. (3d) 201; Smith v. Pellegrini, 2008 46927 (ON SC), at para. 34; Maimone v. Maimone, 2009 25981 (ON SC).
103During her cross examination, the applicant was repeatedly questioned on the extent of her financial and other disclosure and the timing of her disclosure.
104I do not agree with the respondent that the applicant failed to make financial and other disclosure. Based on the evidence before me, the respondent had all relevant financial disclosure to decide of the applicant’s income for child support purposes as well as information relating to her application for division 1 protection under the Bankruptcy and Insolvency Act, well before the retainer of his expert to generate an income loss report. I note that the respondent also points to outstanding disclosure from questioning, which took place only weeks before the commencement of the trial. Yet, as the applicant points out, the respondent’s expert delivered a report. The applicant argues that disclosure started after the separation, and the documentary evidence supports her position.
105I am satisfied, based on the tremendous amount of trial time the respondent devoted to this issue, that the respondent was aware of the necessary information regarding the applicant’s consumer approval before the formal retainer of his expert in September 2024. Because the respondent made disclosure and the timing of disclosure as well of its completeness an issue at trial, reference was often made by the parties to communications by the applicant or her former counsel to the respondent’s counsel who was also counsel at trial.
106As I did during the proceedings, I will underline that a trial is no place for an undertaking or a refusals motion. It is noteworthy that some of the communications that the respondent presented to the court as evidence were from his lawyer who was also counsel at trial which, in my view, is not only hearsay evidence, but also puts counsel in the difficult position of potentially being both a witness and an advocate.
107Having said that, it is clear from the evidence before me that by email dated August 22, 2024, the applicant forwarded an Order Approving Consumer Proposal dated March 21, 2024, to the respondent’s counsel as well as statements for the period 2018 to 2024. In an email dated November 18, 2024, the applicant forwarded to the respondent’s counsel documents which were requested from the insolvency trustee, Farber & Partners Inc., included notices of assessments from CRA. The documents included corporate and personal notices of assessments for 2022 and a statement of account.
108The applicant also argues that the respondent repeatedly asked for documents that did not exist. There is some truth to that statement. For example, the respondent argues that he was not provided with financial statements for the medical professional corporation beyond 2022. Of course, no documents would exist because it was no longer an active professional corporation, information that the applicant points out was readily available on the public website for the College of Physician and Surgeons.
109In his opening statement, the respondent submitted that the applicant did not provide her 2022 tax return, general ledger and bank statements. The applicant says she provided general ledgers. Ms. Russell testified that it would have been important to see the general ledgers for the years ended September 30, 2022, 2023 and 2024 if there were any activities in them. She conceded that they would not be as important if there was no activity. Since the professional corporation ceased operation in 2022, none could be provided. Moreover, the applicant’s business was not complicated. According to Ms. Russell, the General Ledger which would show details of certain expenditures or their composition to determine whether there were expenses reported either personally or through the corporation “that are not related to the business” to determine if there should be any “add backs and gross ups”.
110Based on the record, those concerns do not exist. The applicant was certainly not challenged on the expenses at trial and certainly CRA accepted the expenses, in the reassessment, as business expenses. I note that the applicant did not have a complex corporation. There is evidence before the court about how much retained earnings was in the corporation; the overhead expenses are modest; it is reasonable to assume that a medical doctor, on their own, would have certain licensing, membership and insurance dues as well as professional fees (the applicant had an accountant), and other licensing fees. From her evidence, she had multiple contracts at one point which required travel. She was re-assessed for two years, and the result yielded numbers in her favour, less retained earnings in the corporation that initially reported, and Ms. Russell had access to all this information.
111At trial, Ms. Russell testified that she relied on the accuracy of the financial statement provided by the professional corporation and added that “so I had no reason to question on the surface whether the dividends were paid or not.” According to Ms. Russell, her initial concern was that there was a lump number in the financial statement that showed dividend each year, but she did not know who received them. She acknowledged that “they showed up on personal tax returns.” Ms. Russell did not point to anything else in the applicant’s financial statements which caused her any concern. Disclosure must be proportional. On the evidence, the respondent had an evidentiary basis for determining the applicant’s income.
112There is point in time when breadth of the disclosure requests becomes disproportionate to the issues involved in the case. This may be such a case; it was evident at the trial to the extent that it consumed much of the trial time. The undertakings and refusals chart dealt with questions which are overbroad and deal with issues which were not the subject of the trial before me. In my view, questioning completed two weeks before the trial and the request for bank records and credit card statements going back to 2016, is antithetical to the primary objective of the Family Law Rules: O. Reg. 114/99.
113In my view, this is not a case where the applicant prepared her own tax returns. Her tax returns were prepared by an accountant. Ms. Russell never asked to speak to her accountant who prepared the documents. Ms. Russell’s premise assumes that the accountant prepared tax and other financial statements without being satisfied of the figures in the documents. This is also not a case where the applicant had multiple businesses. She received income from various sources, some paid directly to her professional corporation, which she would then withdraw, and some paid directly to herself. This is not a complicated case for determining income, and the requests goes well beyond what is required under the Family Law Rules. Ms. Russell says that she did not ask to speak to the accountant.
114I agree with the applicant that she had made disclosure demonstrating a decade of stable employment and remuneration. From the evidence before the court, she had produced financial disclosure going back to 2014 which included notices of assessment, reassessments, income tax returns, financial statements of the professional medical corporation, claims summary statements, banking information, consumer proposal disclosure, T4s, and more. The evidence shows a somewhat consistent income stream; for many years before they separated, it was the respondent who hired the accountant to prepare the parties joint tax returns.
iii. Applicant’s income calculated for support purposes
115The applicant has had somewhat significant fluctuations in income over the past six years, even including her pre-tax corporate income. Section 17 of the Guidelines gives the court authority to determine a spouse’s income in an amount that is fair and reasonable having regard to their income over the preceding three years, and considering, among other things, any pattern of income, fluctuations of income, or receipt of non-recurring amounts during those years: An average is one pattern of income, but it is not the only one: Punzo v. Punzo, 2016 ONCA 957, 90 R.F.L. (7th) 304, at para. 24.
116In Mason, the Court of Appeal concluded that “income” for that purpose may include amounts of pre-tax corporate income added to line 150 income under s. 18 for those three years: Mason, at para. 173. In Mason, the Court of Appeal state that in determining the spouse’s income, the court may also consider amounts of pre-tax corporate income included in a spouse’s income under s. 18 for each of the last three years: Mason, at para. 163. In this case, the applicant’s last three years of income will include income as a salaried employee.
117However, in my view given the fluctuation of income, the mixture of pre-tax corporate income, self-employment income, contract income, and line 150 income for the applicant over the past three years, it would be fair and reasonable to average her income over the over the last three years.
118I note that the applicant’s income for 2023 is the income determined by the respondent’s own expert, Ms. Russell. The applicant’s income for 2024 is based on her income as a salaried employee and contract work CAMH.
119In the result, the applicant’s average income for the past three years: 2024 and 2025 ($194,213), 2023 ($164,023), which results in an income, for retroactive child support purposes in the amount of $184,150.
120As for ongoing child support, the applicant’s actual, and projected income of $194,213 is appropriate in the circumstances.
iv. Is the respondent underemployed?
121The applicant argues that income should be imputed to the respondent because he is underemployed, travels extensively abroad, including to Washington, D.C., Zurich, Victoria, Curacao, Tanzania, Senegal, Halifax, and Sri Lanka, which suggests he earns a higher level of income. She asserts that the respondent has not provided financial disclosure regarding significant amounts transferred to his bank accounts or credit card.
122I would reject the argument that the respondent is intentionally underemployed. The respondent has been an Assistant Professor at the at the University of Toronto in the Faculty of Architecture, Landscape and Design since 2019.
123The respondent obtained his Bachelor of Applied Science degree in 2001, and completed a Masters degree in mechanical engineering. He has had various jobs in the United States before finding employment in Canada in 2008. After being laid off from his employment, the respondent pursued his Ph.D. in 2015. He has worked at the University of Toronto since 2018, when he was still completing his Ph.D. He is a Professor of Building Science at the Faculty of Architecture, and has been an Assistant Professor since at least 2019, a position he still held at the time of the trial. He completed his Ph.D. in 2019. He has worked consistently since then except for the year of his sabbatical.
124I also do not accept that the applicant’s argument that the respondent is underemployed because he does not take on more side work. The respondent has a full-time job, though he was on sabbatical at the time of the trial. I find the applicant’s evidence that there may be restrictions imposed by the faculty for him to engage in outside remunerative activities to be credible, even though he was not sure if for faculty to earn extra income, and this was not seriously challenged by the applicant.
125The applicant also asked the court to impute income to the respondent on the basis of the research funding that he receives and his extensive foreign travel. I find the respondent’s evidence that the funds are disbursed for equipment and students to be credible. As for the foreign travel, the respondent could have assisted the applicant and the court in providing some evidence that his travel was work related, he did not do so. Lifestyle can be evidence to ask the court to draw a reasonable inference that the payor has greater income than that disclosed: Bak v. Dobell, 2007 ONCA 304, 86 O.R. (3d) 196. I accept the respondent’s explanation that the travel is work related. His extensive travel appears to coincide with his sabbatical as the majority of it took place in the last year.
126I accept that his primary source of income is his salary. He has earned modest amounts in marking exams. The respondent provided his income based on what is reflected on his Notices of Assessments. In 2023, the applicant voluntarily took a sabbatical for the 2024 to 2025 academic term. in 2023, and his reported income for that year was $161,610. At the time of the trial, he had not yet filed his income tax return for 2024 but had T4 income of $150,039.
127At trial, the respondent testified that his salary increase occurs every July 1. He could not advise the court what his income would be in 2025. Therefore, I have imputed an income to him for 2025 in the amount of $180,000, on the basis that he would have returned to full time work as a professor and received his increase, which was anticipated in July 2025.
128Certainly, there may be questions raised about the respondent taking a sabbatical at this time which would result in 12.5% less income for support purposes, but this issue was not raised by the applicant at trial. Because of the timing of the respondent’s sabbatical, his annual pay increase, the respondent’s lack of knowledge about his actual income for 2025, some imputation will be necessary.
129I accept that the imputation may not capture one of the respondent’s pay increase. The applicant did not raise whether income should be imputed to the respondent because he chose to take a sabbatical for the 2024/2025 academic term, which will mean that he will only earn 87.5% of his income. As the applicant has pointed out, the respondent’s income has increased dramatically over time. His income between 2018 to 2024 is as follows:
2018 $49,800
2019 $108,202
2020 $119,549
2021 $128,056
2022 $143,693
2023 $161,560
2024 $150,039
130Based on the respondent’s evidence, I have calculated/imputed his 2025 income, subject to the discussion below, in the amount of $180,000.
v. Should income be imputed to the respondent because of loans from family members?
131The applicant argues that the respondent has not disclosed the source of income deposited to his Toronto Dominion Bank account or a transfer or deposit of $54, 000 made to his CIBC Visa.
132The respondent testified that he has been borrowing money from his brother and his parents since around the end of 2020. He says that the account is owned by a “Vladimir Dellar,” whom I assume is his brother.
133There is no actual loan agreement or promissory note. The respondent has produced two typed documents entitled “Summary Statement of Account”. The first is dated September 15, 2024, and indicates “cumulative family loan amount” “$157,000”. A typed name, “Vladimir Deller” as well as an address is on the bottom of the document. The document is unsigned. The date of the document is only weeks before the initial start date of the trial in October 2024. There are no terms noted on the document.
134The second document dated January 13, 2025, just four months later, and two months before the trial started, indicates a number which has increased by $76,400. The respondent claimed that it is a loan from his brother. He says he has not paid back any party of the loan. He says that the agreement was “basically once everything is financially stabilized with going to court”, he can start pay the loan back afterwards. The document includes the following “terms”:
Effective Interest Rate = Prime + 2%
Repayment to commence once the divorce has been finalized
Repayment Schedule: $1500 per month until loan has been repaid
135The court may impute income where the evidence respecting income is not credible for any other reason: see: Heard v. Heard, 2014 ONCA 196, 317 O.A.C. 45, at paras. 33-35. As for the loans, I do not find the respondent’s evidence of loans from his family to be credible. There are no contemporaneous documents evidencing any loans. The documents were made at least three or four years after the respondent claimed he was started borrowing money from his family. At trial, the respondent did not enlighten the court as to why the documents refer to “family loan”, but only as one name at the bottom.
136The respondent says that he borrowed from his mother as well, but there is no document evidencing any loan from her. The documents were made shortly before trial dates. They are not signed. They are not consistent – one document makes no reference to any terms for the loans while the other does. The manner of repayment is not specified.
137The failure by one party to disclose would mitigate the obligation of the recipient to provide an evidentiary basis to impute income: see, Graham v. Bruto, 2008 ONCA 260.
138The court is satisfied that the respondent has presented an evidentiary basis for the court to conclude that income should be imputed to the respondent. The onus now shifts to the respondent to satisfy the court that income should not be imputed: Lo v. Lo, 2011 ONSC 7663, 15 R.F.L. (7th) 344, at para. 57; McKenna v. McKenna, 2015 ONSC 3309, 62 R.F.L. (7th) 429, at para. 144.
139I would be inclined to impute income to the respondent because of monies received by the respondent from his mother and brother. By his own admission, he has not paid back any of the funds. The totality of the evidence is more indicative of gifts rather than a loan. Where a party receives regular gifts from their parent, the court may impute the amount of those gifts as income for support purposes: Bak, at para. 75; Korman v. Korman, 2015 ONCA 578, 126 O.R. (3d) 561, at paras. 47-51, 62-65, 67; Marello v. Marello, 2016 ONSC 835. On cross examination at trial, the respondent could not advise of the terms of the repayment of the “loan”.
140In Malkov v. Stovichek-Malkov, 2017 ONSC 6822, at paras. 69-73, Justice McGee noted that where gifts to the husband take on the appearance of a long-term subsidy as if the spouse was a beneficiary of income or benefits from an unwritten trust, the advances bend towards income. In this case, the respondent has been subsidized by his family for at least three to four years, with no credible evidence that it will be paid back.
141The respondent has not discharged the onus by presenting any evidence to rebut or refute the imputation of income: Homsi, at para. 28; Tahir v. Khan, 2021 ONCJ 1, 51 R.F.L. (8th) 231, at paras. 38, 40; E.D. v. J.S., 2020 ONSC 1474, at paras. 164-165; Abumatar v. Hamda, 2021 ONSC 2165, at para. 28.
142By the respondent’s own evidence, he has received approximately $234,000 from his mother and brother, but he did not call either of them to testify. Where a party fails to a witness, without explanation, who may have knowledge of the facts and presumably would be willing to assist the party, or provide relevant documents, the court may draw an adverse inference: see, John Sopinka, Sidney N. Lederman, Alan W. Bryant & Michelle K. Fuerst, The Law of Evidence in Canada, 4th ed. (Toronto, ON: LexisNexis Canada, 2014) at p. 386. Such a failure to produce evidence or to call a material witness amounts to an implied admission that the evidence of the absent witness would be contrary to the party’s case, or at least would not support it: Law of Evidence; Lane v. Kock, 2015 ONSC 1972, at para. 3.
143In this case, I am inclined to draw an adverse inference that neither the respondent’s brother nor mother would have evidence that would be of assistance to him. He has offered no explanation for why neither his mother nor his brother testified at trial. Because they are family, the respondent has exclusive control over them. Evidence from both would have been the best evidence on a material question, and they would have been the best people to provide the evidence in issue.
144The court has broad discretion to impute income where a party fails to disclose all relevant income information to the other party in accordance with the Guidelines, the Family Law Rules, or the jurisprudence: M.A.B. v. M.G.C., 2022 ONSC 7207, at para. 478; Guidelines, s. 19(1).
145Because of the respondent’s lack of transparency regarding the receipt of funds from his family members, I am inclined to impute $25,000 a year to him to his line 150 income reported for 2023 ($161,560), 2024 ($150,039), and the imputed income for 2025 ($180,000), resulting in an average income of $188,853 for retroactive support.
146Because of the lack of clarity from the respondent on his actual income with the anticipated salary increase, in my view, it is fair and reasonable to use the imputed amount to the respondent in determining ongoing child support.
IV. Quantum of child support
147The applicant seeks an order requiring the parties to pay retroactive and ongoing set-off table child support for the children in an amount commensurate with their incomes.
148The respondent submits that table child support should be determined based on an offset between imputed income to the applicant and paid retroactively to the date of separation from January 1, 2019, and ongoing.
149After the separation, the children remained in the matrimonial home with the applicant. The parties initially had a nesting agreement, but both dispute the reason the arrangement did not work; although the respondent had already moved out of the house, he says that when it was his parenting time, on the alternative weekends, the applicant was to move out of the house but refused to do so.
150An attempt to put nesting agreement in place failed. Within the first year of the separation, the parties had a shared parenting arrangement. Their parenting agreement was formalized in the final Minutes signed in 2023. The respondent says that the split in parenting time was 55/45 in favour of the applicant. The children’s primary residence is with the applicant mother. Although I note that the parties’ 19 year old son is in his second year of university where he studies full-time but when he returns home, he stays with the applicant.
151The respondent does not dispute that their son continues to a child of the marriage. While the applicant has pointed out issues with the respondent’s relationship with his son, some of which were conceded by the respondent, the parties have already resolved the issue of parenting.
152The parties agree that no table child support has been paid, though the respondent says that he received $400 in 2020 from the applicant.
153The respondent has provided ranges of support, but the numbers used for the applicant exceed the income that I have determined her income to be for child support purposes. Additionally, it is not apparent from his numbers, whether this information was also inputted for the numbers generated by the website, “MySupportCalculator.ca”.
154Only the applicant provided a Financial Statement (Form) 13 before the trial which included a budget for the children. The respondent on the other hand delivered a Form 13.1, Financial Statement (Property and Support Claims), although the issue of equalization was settled between the parties. There is no budget and only an amount of $400 for “Babysitting costs”.
155Where a spouse’s income is over $150,000 a year, s. 4 of the Guidelines permits the court to choose one of two options: either to use the Table support and an amount for special and extraordinary expenses or, the table amount for the first $150,000, and an amount that court considers appropriate, considering the condition, means, needs, and other circumstances of the children who are entitled to support and the financial ability of each spouse to contribute to the support of the children, as well as s. 7 amounts.
156Both parties have income above $150,000, though there were a couple years, post-separation that the respondent had income above $150,000. I note that after taking into consideration the adjustments that ought to be made to the applicant’s income, including attributing pre-tax corporate income per the numbers in the Russell report, the applicant also had an income of over $150,000.
157In my view, the table amounts should apply in this case and the DivorceMate calculator is sensitive enough to deal with the situation where a child is an adult and away from university, parenting is shared, and the children reside primarily with the mother, as in this case. There is a presumption in favour of the Table amounts in all cases: Francis v. Baker, 1999 659 (SCC), [1999] 3 S.C.R. 250, at para. 42. Neither party suggested that the court should deviate from the presumptive rule and consider the Table amount inappropriate above the threshold. The Supreme Court of Canada has noted that there must be “clear and compelling evidence” for departing from the Guideline figures: Francis, at para. 43.
158In this case, the parties have share parenting. The Supreme Court of Canada noted in Contino v. Leonelli-Contino, 2005 SCC 63, [2005] 3 S.C.R. 217, that the presumption of Table amount is not applicable where the parents share parenting. The court providing the following guiding principles:
(a) no presumption of table amount;
(b) no automatic reduction in child support for shared custody;
(c) no set formula;
(d) no use of pro-rated set-off;
(e) no multipliers;
(f) no need to separate out section 7 expenses; and
(g) no need to resort to section 10 of the Guidelines (re: undue hardship of child).
159Neither have presented any compelling evidence for departure from the Guideline figures. Although the parties’ eldest child is away for school during the year, neither party addressed whether this fact should impact the application of the Table amounts. In this case, both parties urged the court to use the table amounts and set off child support.
160In averaging the respondent’s income over the preceding three years and using the imputed income from monies from his family, I determined that his income for retroactive and ongoing child support purposes was $188,853. I am inclined to use this figure as well for ongoing child support because of the respondent was not able to assist the court with his actual income for 2025 but from his evidence, he would have received a salary increase in July 2025 on his full salary, beyond the date of the trial.
161As for the applicant, her imputed income is $184,150 for the purposes of determining retroactive child support, and $194,218 for the purpose of determining ongoing child support.
162According to DivorceMate, table support for two children in a shared parenting arrangement, with primary residents to the applicant, and one child away at university for eight months (which results in four months of support), would result in the applicant paying $1,930 and the respondent paying $1,951. Since the shortfall is so only $21 and keeping in mind the goal of child support, I would reduce this amount to zero. That is both parties’ obligation for child support is set off.
163I note that although both sides ask to court to make an order for retroactive child support, but neither party has addressed the test for doing so. The Supreme Court of Canada articulated the general principle for retroactive child support in Michel. The children have been in a shared parenting arrangement since shortly after the parties separated. Both parents appeared to have maintained equivalent standard of living for the children.
164As for ongoing child support, subject to annual adjustments, they should be set-off because the respondent’s income with his salary increase, may in fact be higher than the income that the applicant is earning. Child support payable by the applicant, using the same factors, on an income of $194,218 is $1,951, and for the respondent is the same.
i. Section 7 Expenses
165The biggest dispute between the parties regarding section 7 expenses relates to the son’s living expenses while he is away at university. Under the Minutes of Settlement, the parties agreed to a 55/45 split between them on a without prejudice basis. The respondent has contributed 45% towards his son’s university tuition, net of a scholarship that his son has received. He has not contributed to his son’s living expenses on the basis that there was no such agreement to do so in the Minutes, that his son can stay with his paternal grandparents while at school, and that he cannot afford to do so.
166Section 7 expenses are a form of child support. While neither party pointed this out at any point during or their Closing Submissions, the Minutes (Exhibit 14) clearly states that s. 7 expenses were being resolved: “On a temporary, without prejudice basis to any position that the parties may take at trial, including ongoing and retroactive support.”
167Under s. 7(2) of the Guidelines, the amount of an expense set out in s. 7(1), which includes expenses for a child’s education or training, is to be shared by the parents in proportion to their respective incomes after deducting from the expense the contribution, if any, from the child. The court must consider any subsidies, benefits or income tax deductions or credits relating to the expense, and any eligibility to claim a subsidy, benefit or income tax deduction or credit: s. 7(3).
168I conclude that the parties must pay their proportionate share of all s. 7 expenses retroactive to when their son began university in 2024, as an adjustment was clearly contemplated by their agreement. Given by determination of income the proportionate share is on a 50/50 basis, subject to any available deductions pursuant to s. 7(3) of the Guidelines.
V. Procedural fairness
169Intentional or not, there was tremendous procedural unfairness to the applicant because of steps taken by the respondent. Below, I mention some of the most troubling ones, which undermine the rules.
170The primary objective of the Family Law Rules is “to enable the court to deal with cases justly”: r. 2(2), having regard to the factors enumerated in r. 2(3) including “ensuring that the procedure is fair to all parties;” “saving expense and time;”, “dealing with the case in ways that are appropriate to its importance and complexity;” and “giving appropriate court resources to the case while taking account of the need to give resources to other cases”.
171The court has a duty to manage cases: r. 2(5). The court has a duty to apply the Family Law Rules to promote the primary objective: r. 2(4), which includes managing cases: r. 2(5). The parties and their representatives must help the court to promote the primary objective: 2(4). The respondent served an income report of his expert on the applicant’s income determination from 2016 to 2023, less than two weeks before the trial. This was a first report.
172Even though the parties engaged in litigation for five years, the respondent served an income report ten days before the trial, and an addendum report of his expert after a week of trial, and beyond the time estimated for the trial to be completed. The applicant, who was self-represented, had no opportunity to respond to the in report. On cross examination, the expert admitted having receiving documents from the respondent’s counsel a year before the trial started, and being formally retained only in September 2024, which would have been a month before the trial was initially scheduled to start.
173The Endorsement of Justice Horkins dated October 1, 2024, indicates that the respondent requested an adjournment of the trial because of alleged non-disclosure by the applicant and due to “business travel”. Less than a month before the trial the parties completed questioning; the trial was unnecessarily lengthened by the respondent’s attempts to deal with undertakings and refusals at the trial. From the record at the trial, it is not clear what non-disclosure could have prevented the respondent’s expert from being engaged sooner, she herself indicated that she had started receiving information from the respondent’s counsel almost six months earlier.
174The addendum report was dated April 12, 2025, and served on the applicant between April 12 and April 15, 2025, after the parties had participated in a mid-trial conference with Diamond J., only a week before. Counsel for the respondent conceded that there was no mention of the addendum report to Justice Diamond. Based on the submissions of counsel, evidence given by the applicant during her testimony at the trial was also used as a basis for the addendum report.
175The respondent called a representative of A. Farber & Partners to testify. The applicant was not provided with a copy of the documents beforehand which the respondent intended to tender as evidence to the court.
176Although counsel for the respondent stated that the Trial Management Judge, Justice Nakonechny gave the respondent leave to do so. That is not the case. From her endorsement on October 9, 2024, Justice Nakonechny stated:
Any refusals to be dealt with by the trial judge. There is a well-established body of case law which deal with the effect of a party refusing to answer a question, and whether they can lead evidence at the trial on the question refused. The cases do not contemplate what amounts to a motion within the trial on undertakings and refusals, which was the case throughout the trial.
177The respondent consumed much of the trial time, leaving the applicant with less time to complete the cross examination of the respondent and the respondent’s witnesses. Any attempt by the court to manage the respondent’s trial time was ignored. Following my endorsement dated March 21, 2025, to the parties allocating the remaining trial time, counsel for the respondent wrote a lengthy email directly to me, without invitation, or the consent of the applicant, to suggest additional days to complete the trial.
178The Family Law Rules were amended in 2024 to address communications out of court. Rule 1.8 (12.2) mirrors the provisions under r. 1.9 of the Rules of Civil Procedure. The Family Law Rule reads:
A party to a case, a party’s lawyer or other representative or anyone else acting for or on behalf of a party shall not, directly or indirectly, communicate out of court with a judge or associate judge about a case unless, (a) the parties consent, in advance, to the out-of-court communication; or (b) the court directs otherwise.
179I adopt Justice Nelson’s comment in the decision of Baird v. Taylor 2000 28470 (ON SC), which was as relevant then as it is today. He stated:
Perhaps practice appears somewhat informal in our courts these days given the case conferences and settlement conferences that form a large part of our workload. It is nonetheless important to stress that, no matter what the particular procedure, the Family Court is a court of law and the manner of addressing issues in court requires personal attendance or a prearranged telephone or video conference unless the court has ordered otherwise. All communications should be by personal attendance, otherwise the integrity of the system is compromised.
180In this case, the content of counsel’s email, while a concern, did not give me cause for concern that the applicant would be prejudiced in the circumstances.
VI. Disposition
181For the reasons above, I make the following order:
i. The applicant’s request for a sealing order is dismissed.
ii. The applicant’s income for retroactive child support purposes, from the date of separation to December 31, 2025, shall be based on an imputed income of $184,150.
iii. Effective January 1, 2026, and subject to paragraph (ix) below, the applicant’s income for child support purposes shall be based on her actual income of $194,218.
iv. The respondent’s income for retroactive child support purposes from the date of separation to December 31, 2025, shall be based on an imputed income of $188,853.
v. Effective January 1, 2026, and subject to paragraph (ix) below, the respondent’s income for child support purposes shall be based on an imputed income of $188,853.
vi. Subject to paragraph (ix) below, the applicant’s claim for retroactive and ongoing child support shall be set off against the amount that the respondent would have otherwise been obliged to pay for child support from the date of separation (January 2019).
vii. Subject to paragraph (ix) below, effective January 1, 2024, the parties shall each pay 50 percent of the children’s s. 7 expenses in accordance with the Federal Child Support Guidelines.
viii. Effective July 1, 2026, and thereafter, the parties shall pay their proportionate share of the children’s s. 7 expenses, so long as each child remains a child of the marriage, as defined by the Divorce Act and the jurisprudence, based on their respective incomes.
ix. For as long as the children remain a child of the marriage, each party must provide updated income disclosure to the other party each year no later than July 30 in accordance with the Child Support Guidelines, and the amount of child support payable by either party shall be adjusted in accordance with the updated information.
VII. Costs
182If the parties are not able to resolve costs as between themselves, I will receive costs submissions, forwarded to the Trial Co-Ordinator, limited to five pages, double-spaced, 12-point font, and a Bill of Costs, and supporting dockets or computer-generated time docketed, based on the following schedule:
i. The applicant shall deliver Costs submissions and a Bill of Costs, no later than 45 days from the date of these Reasons.
ii. The respondent shall deliver his responding submissions, and any supporting materials mentioned above, 45 days thereafter.
iii. Any Reply submissions, if necessary, shall be delivered no later than ten days thereafter.
A.P. Ramsay, J
Released: January 14, 2026