Background

The parties married in India in 2003 and immigrated to Canada in 2006. Their daughter was born in 2007 and they separated in 2011. Throughout the marriage, the wife was the primary caregiver and had limited paid employment. The husband controlled the family finances and operated multiple businesses, often through corporations. Following separation, the wife sought child support, spousal support, financial disclosure, equalization and divorce. The litigation quickly became dominated by the husband’s persistent failure to provide meaningful disclosure.

Procedural History

Despite repeated court orders, the husband failed to produce complete and reliable financial information. His pleadings were ultimately struck due to ongoing non-compliance, an exceptional remedy reserved for serious disclosure breaches. Even after that, he continued to advance unsupported income positions and resisted support obligations.

Issues

The Court had to determine:

1. Whether the husband’s income should be imputed for child and spousal support;
2. The proper retroactive and ongoing child and spousal support;
3. The effect of struck pleadings on the husband’s ability to contest support; and
4. Whether costs should be awarded and how they should be enforced.

The Law

Courts require full and frank financial disclosure to determine child and spousal support. Where a payor spouse controls business income and disclosure is unreliable or withheld, courts may impute income based on available evidence, lifestyle indicators, and reasonable inference. Where pleadings are struck for disclosure failures, the non-compliant party’s ability to dispute the other party’s evidence is sharply restricted. Courts may also order significant costs where litigation conduct undermines the process, particularly where non-disclosure forces unnecessary motions and delay.

Analysis

When will the Court impute income where a spouse controls businesses?

The Court imputed income because the husband’s reported earnings did not reflect his true financial capacity. He controlled business operations, could influence how income appeared on paper, and failed to provide coherent financial records. The Court confirmed that imputation is not punitive it is necessary to ensure support reflects real ability to pay, especially when a payor spouse creates uncertainty through non-disclosure.

Does the Court need perfect financial proof before imputing income?

No. The husband argued the Court could not impute income without precise records. The Court rejected that position: when a party’s disclosure failures create uncertainty, the Court is entitled to draw reasonable inferences, and that uncertainty is resolved against the non-disclosing party.

What is the legal impact of struck pleadings in a support case?

Struck pleadings are not symbolic. Because the husband’s pleadings were struck, he was substantially limited in disputing entitlement and quantum. The Court accepted the wife’s evidence where it was reasonable and internally consistent, noting that the husband’s conduct eliminated any reliable alternative evidentiary foundation.

Can the Court order large retroactive child and spousal support where there has been non-disclosure?

Yes. The Court ordered substantial retroactive child support after finding the husband had the ability to pay during the retroactive period and the child had been under-supported for years. Retroactive spousal support was also ordered because the wife’s economic disadvantage flowed from the marriage and the husband’s control over finances. The Court rejected “delay” arguments where delay was tied to the husband’s disclosure failures.

Can costs be treated as enforceable like support?

Yes, in appropriate cases. Given the husband’s litigation misconduct, the Court awarded substantial costs to the wife and emphasized that meaningful enforcement mechanisms were required particularly where a party deliberately frustrates the court process and forces the other party to spend money simply to obtain basic disclosure and support.

• Can the Judge order costs? Yes, in this case the Judge ordered $80,000 in costs.
• Can the court leave the matrimonial home to the wife? Yes, in this case the husband had substantial assets that were not disclosed and left the wife with sole ownership of the house.
• Can the court order child and spousal support arrears if the payor fails to provide financial disclosure? Yes, in this case the court ordered the husband to pay $496,716 in arrears of child and spousal support from 2011 to 2017.
• Can the court impute income on the husband? Yes, if the husband works in family-owned businesses and understates his income and refuses to provide financial disclosure, the court can impute income.

 

 

Conclusion

The Court imputed income at a level significantly higher than the husband’s reported income, ordered substantial retroactive child support and spousal support, and awarded significant costs against the husband with enforcement consequences. The decision reinforces that:

• non-disclosure, especially by business owners, will lead to imputed income and adverse inferences;
• struck pleadings have real, case-determinative effects;
• retroactive support is a predictable remedy where underpayment results from non-disclosure; and
• serious litigation misconduct can justify costs that are enforced with “teeth.”