Background
This case involved two spouses who were both born in Cuba. They
married there on November 12, 1999, and later had one child,
born April 4, 2003. In March 2005, the family immigrated to
Canada and later became Canadian citizens. After arriving in
Canada, the mother worked steadily as a housekeeper at a hotel.
The father initially worked at a winery and later became
involved in the restaurant industry. The parties separated on
May 19, 2014.
By the time the matter reached trial, much of the parenting and
corollary relief had already been resolved. At the outset of the
trial, the parties entered a comprehensive consent dealing with
parenting arrangements and other related issues. The mother was
granted custody, and the father’s parenting time was limited to
one Sunday per month. The consent also authorized the mother to
renew passports and travel internationally with the child
without requiring the father’s consent. The parties agreed to
share section 7 expenses equally, subject to prior written
consent. Spousal support claims were dismissed, and the divorce
was severed and allowed to proceed uncontested.
As a result, the trial proceeded only on the remaining financial
issues. Those issues were the father’s income and whether income
should be imputed, child support including retroactive support
and arrears, and equalization particularly allegations about
property in Cuba and the value of the father’s business,
Mojito’s House Ltd.
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The Law
How does the court determine the husband’s income for child
support when the husband has unreported cash business income?
When the payor’s reported income does not reflect reality,
particularly where self-employment, cash benefits, or in-kind
advantages exist, the court may impute income based on earning
capacity and the best evidence available.
Does the value of foreign property form part of net family
equalization in Ontario? Yes. Where a spouse alleges foreign
property exists and has value, the burden is on the claimant to
prove ownership and value with credible evidence. Thus, you may
obtain the property deed then appraise it as of the date of
separation.
How does the court determine the value of a business? The court
could order a business valuation. Where a business is sold, the
court will often treat the actual sale price as the best
evidence of value, especially where the sale is supported by
documents and credible third-party testimony, and where the
business history shows losses rather than profits.
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Analysis
When will the court impute income where a payor reports very low
income after separation?
In this case the court imputed income because the father’s Line
150 income and tax reporting did not reasonably reflect his true
earning capacity. The mother’s income was stable and undisputed,
but the father’s income position was highly contentious because
his tax returns showed very low or even nil income in some
years. The court did not accept that the father’s reported
income told the full story.
The evidence showed that the father was operating Mojito’s House
Ltd. full-time during 2013 and 2014. His sworn financial
statements reflected income around $24,990, which did not align
with the low income shown on his tax returns. The court also
considered that he received cash tips, in-kind benefits, and
advantages associated with running the business, including food
and drink and access to a vehicle. In addition, the father’s
historical Canadian income before the business period tended to
fall within a range of roughly $30,000 to $35,000.
Rather than adopting either extreme position, the court selected
an income figure supported by the most credible and consistent
indicators. It rejected the father’s low-income position as
unrealistic but also rejected the mother’s proposed imputation
at $45,000 because the record did not support that number. The
result was imputed income of $35,000 per year for 2014, 2015,
and 2016, reflecting earning capacity and the evidence of his
work and benefits.
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How does the court treat irregular child support payments when
there is no existing order after separation?
The court treated child support as an obligation that must be
quantified and enforced even where payments were inconsistent
and informal. Here, there was no child support order immediately
following separation. The court reviewed evidence of the
father’s irregular payments over the period from June 2014 to
June 2016 and then applied the Guidelines using the imputed
income figure.
Once the court calculated the guideline amount owing from June
2014 to August 31, 2016, it compared that total to what the
father had actually paid during the same time. The court found
that guideline child support owing over that period was $8,181,
that the father had paid $5,677, and that arrears of $2,504
remained outstanding. Importantly, the arrears were not treated
as optional or negotiable. They were ordered to be paid out of
the father’s share of the net proceeds of sale from the
matrimonial home.
Going forward, the court fixed ongoing child support at $303 per
month beginning September 1, 2016, and imposed annual financial
disclosure requirements on the father. The disclosure condition
mattered because the court was clearly concerned about the
reliability of the father’s income reporting and sought to
ensure child support remained responsive to actual income.
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Can one spouse obtain unequal division of the proceeds of the
matrimonial home just because they contributed more?
No. The father sought unequal division of the remaining sale
proceeds from the matrimonial home, arguing he had contributed
more. The court rejected that request. The decision reinforces a
common point that parties often misunderstand unequal
contribution alone is not enough. The legal threshold for
unequal division is unconscionability, which is a high bar and
requires more than a sense that one person paid more or
“deserves” more.
The matrimonial home had been sold in February 2015 and after
deductions and partial releases, $26,794 remained in trust. The
court ordered the remaining proceeds to be divided equally,
subject only to the adjustment required to satisfy the child
support arrears from the father’s share. The message was
straightforward: equal division remains the default, and it
takes much more than differing contributions to depart from it.
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What kind of evidence is required to include foreign property in
equalization?
The foreign property issue was one of the most contentious parts
of the case. The mother alleged that an apartment in Villa
Clara, Cuba was built during the marriage, held in trust for the
parties, and worth about $45,000 CAD. The court rejected this
claim and assigned the alleged Cuban property a nil value for
equalization purposes.
The reason was evidentiary. The court found that the property
was constructed before the marriage and that it had been
transferred back to the father’s father in compliance with Cuban
law. Crucially, there was no persuasive evidence that the father
owned the property at separation and no reliable evidence
establishing a trust arrangement. In a case like this, the court
requires proof of ownership and proof of value. Without those
pillars, the claim cannot support an equalization adjustment.
This portion of the decision is especially useful in practice
because it shows how courts approach foreign property
allegations: they are not dismissed because they are foreign,
but they will fail if they are supported only by assertion
rather than documentation and credible corroboration.
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Why did the court refuse to make orders about household contents
and jewelry?
The court declined to make any order about household contents or
jewelry because the evidence was too weak to support a
meaningful result. There were no appraisals, the parties’
evidence was conflicting about possession and value, and the
court emphasized that equalization focuses on monetary
calculations rather than redistributing specific items “in
specie,” especially where the items would not materially affect
the overall net family property picture.
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