Riel v. Holland, (2003) 177 O.A.C. 162 (CA)

• Judge: Carthy, MacPherson and Simmons, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: August 26, 2003
• Jurisdiction: Ontario
• Citations: (2003), 177 O.A.C. 162 (CA);2003 CanLII 3433 (NS CA);2003 CanLII 3433 (ON CA);67 OR (3d) 417;232 DLR (4th) 264;42 RFL (5th) 120;[2003] CarswellOnt 3828;[2003] OJ No 3901 (QL);177 OAC 162

Riel v. Holland (2003), 177 O.A.C. 162 (CA)

MLB headnote and full text

Temp. Cite: [2003] O.A.C. TBEd. OC.011

Frederick Keith Riel (applicant/husband/appellant) v. Jan Constance Holland (respondent/wife/respondent)

(C37970)

Indexed As: Riel v. Holland

Ontario Court of Appeal

Carthy, MacPherson and Simmons, JJ.A.

October 8, 2003.

Summary:

A couple separated after a 16 year marriage. The father, who operated an independent electrical contracting business, consented to pay monthly child support of $1,732. He also contributed to the children's expenses. He also consented to pay $150 per month spousal support. Subsequently, the father ceased operating the business and took a salaried position which generated a significantly lesser income. He applied to reduce child support and his obligations for the children's expenses. He also sought to have charging orders against his home and cottage discharged. The wife applied for, inter alia, increased child support and spousal support.

The Ontario Superior Court imputed income to the father, holding that he was intentionally underemployed. The court "grossed up" the father's income to take account of the reality that the father paid very little tax on his business income. The court increased the father's child support obligation to $2,156.20 per month. It continued the charging orders. The court dismissed the mother's cross-application for increased spousal support. The father appealed. The mother cross-appealed.

The Ontario Court of Appeal dismissed the appeal and the cross-appeal.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support Guidelines (incl. nondivorce cases) - Calculation or attribution of income - A father operated a contracting business - In 2000, he ceased operating the business and took a salaried position which generated a significantly lesser income - The father sought to reduce child support - He claimed that he had discontinued the business due to lack of credit, difficulty financing jobs, bad debts and trouble finding big jobs due to lack of employees - The Ontario Court of Appeal affirmed that the father was intentionally underemployed - His explanations for discontinuing the business were belied by the business' strong financial results in 1998, 1999 and 2000 - The court stated that "an employment decision that would lead to two children receiving $912 instead of $1,732 per month needs to be justified in a compelling way" - Nothing in the father's conduct or testimony came close to providing such justification - The court affirmed the trial judge's decision to impute income to the father based on an averaging of his last three years' income - See paragraphs 20 to 25.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support Guidelines (incl. nondivorce cases) - Calculation or attribution of income - A father operated a contracting business - The trial judge noted that the father's use of the business to earn income and pay personal expenses resulted in substantial tax savings for him - This meant that he had significantly more real income than he would have had if he had been required to pay personal income taxes - Therefore, the trial judge grossed up the father's income for the purpose of determining his child support obligation to take account of the reality that the father paid very little taxes on his business income - The Ontario Court of Appeal affirmed the decision - See paragraphs 26 to 37.

Family Law - Topic 4045.5

Divorce - Corollary relief - Maintenance - Support Guidelines (incl. nondivorce cases) - Calculation or attribution of income - Section 19(1) of the Federal Child Support Guidelines defined certain specific circumstances in which income could be imputed and set out the criteria to be met in those circumstances - The Ontario Court of Appeal stated that "The wording of s. 19 of the Guidelines is open-ended ('which circumstances include'), thus indicating that the categories listed in that section are merely examples of situations in which income may be imputed. There are, therefore, other potential scenarios in which income can, and should, be imputed." - See paragraph 36.

Cases Noticed:

Drygala v. Pauli (2002), 164 O.A.C. 241; 219 D.L.R. (4th) 319 (C.A.), refd to. [para. 24].

Orser v. Grant, [2000] O.T.C. Uned. 302 (Sup. Ct.), agreed with [para. 32].

Moran v. Cook, [2000] O.T.C. 507; 9 R.F.L.(5th) 352 (Sup. Ct.), agreed with [para. 32].

Sarafinchin v. Sarafinchin, [2000] O.T.C. Uned. 754; 189 D.L.R.(4th) 741 (Sup. Ct.), agreed with [para. 32].

Manis v. Manis, [2000] O.T.C. 880 (Sup. Ct.), agreed with [para. 32].

Brans v. Brans, [2000] O.T.C. 894 (Sup. Ct.), agreed with [para. 32].

Lavoie v. Wills (2000), 280 A.R. 16; 13 R.F.L.(5th) 93 (Q.B.), agreed with [para. 34].

Brinkos v. Brinkos (1989), 33 O.A.C. 295; 69 O.R.(2d) 225 (C.A.), refd to. [para. 39].

Statutes Noticed:

Divorce Act Regulations (Can.), Federal Child Support Guidelines, SOR/97-175, sect. 18 [para. 27]; sect. 19(1) [para. 20].

Federal Child Support Guidelines - see Divorce Act Regulations (Can.).

Counsel:

David M. Goodman, for the appellant;

Jeffery Wilson and Brenda Christen, for the respondent.

This appeal and cross-appeal were heard on August 26, 2003, by Carthy, MacPherson and Simmons, JJ.A., of the Ontario Court of Appeal. MacPherson, J.A., delivered the following decision for the court on October 8, 2003.