Lavie v Lavie 2018 ONCA 10

Facts

The parties began living together in 2000, married in 2002.  The parties have two children together.  The parties separated, with no reasonable prospect of reconciliation in 2009.  The parties agreed on joint custody of their children.  Furthermore, the parties agreed to a shared parenting schedule whereby the children spent equal time with both parents.

The Mother was a teacher from 1998 to 2004.  Following the birth of the parties’ second child in 2004, the parties’ decided that the Mother would not return to work as a teacher.  In 2006, the Mother began operating a children’s play centre.  The Father was an editor of a television sports show from 1996 to 2012 when his employment was terminated.

At trial, the Father was ordered to pay retroactive child and spousal support based on his annual income up until his termination at the end of 2012 and thereafter based on an imputed income of $70,000.00.

With respect to the Mother, the trial judge declined to impute an income equal to a teacher’s salary to her.  Instead, based on the fact that the parties agreed that the Mother should not return to teach, the trial judge found that she was not intentionally underemployed. The judge accepted that the Mother’s income at the time of separation was $15,000 at the date of separation and $35,000 in 2012.

The Father brought an appeal for, amongst other things, that the Mother’s income should be imputed in an amount equal to the teacher’s salary as the Mother remained qualified as a teacher. Specifically, the Father argued that the trial judge erred in imputing an income to him when he was in fact unintentionally under employed, while imputing no income to the Mother was intentionally underemployed.

Analysis

The Court of Appeal found that the trial judge erred in not imputing income to the Mother. The Court of Appeal noted that there was no evidence to support the fact that the Mother could not resume her teaching career at the time of separation or at the time of trial.  Furthermore, the Court of Appeal found that the Mother’s teaching career had not been compromised by her marriage or her assumption of household responsibilities.

Section 19(1)(a) of the Federal Child Support Guidelines holds that the Court is permitted to impute income where a spouse is intentionally underemployed, other than where the under-employment or unemployment is required by the needs of a child of the marriage. The trial judge found that section 19(1)(a) of the Federal Child Support Guidelines was not engaged, but the Court of Appeal disagreed. The trial judge based his finding on the conclusion that the decision for the Mother to leave her teaching career and begin operating children’s play centre was a joint decision made by the parties.

The Court of Appeal notes that there is no requirement of bad faith or intention to evade support obligations inherent in intentional underemployment. The Court of Appeal found that if a parent is earning less than she or he could be, he or she is intentionally underemployed. From the time that the Mother chose to start the play centre and earn $15,000 per year rather than $70,000 per year, the Mother was intentionally underemployed.  The Court of Appeal found that there was no reason that the Mother could not resume her teaching career at the time of separation or at trial.

The Court of Appeal found that the fact that opening the children’s play centre was a joint decision does not alone justify imputing $70,000 in additional income to the Father and no additional income to the Mother.

As such, the court of Appeal decided that it is appropriate to either impute additional income to both parties or to neither of them.

The Court of Appeal found that once the Father became unintentionally underemployed, it was not appropriate to impute to him his former full salary while at the same time imputing no additional income to the Mother. As such the Court of Appeal imputed an income of $70,000 to both parties such that they are deemed to be earning the same amount.  In this way, neither party owes the other spouse or child support.