



COURT OF APPEAL FOR ONTARIO

CITATION: Lavie v. Lavie, 2018 ONCA 10

DATE: 20180110

DOCKET: C61548

Sharpe, Rouleau and Fairburn JJ.A.

BETWEEN

Kevin Lavie

Applicant (Appellant)

and

Tanya Lavie

Respondent (Respondent)

Kevin Lavie, acting in person

Christine A. Torry, for the respondent

Heard: November 2, 2017

On appeal from the judgment of Justice Steve A. Coroza of
    the Superior Court of Justice, dated October 5, 2015 with reasons reported at [2015]
    W.D.F.L. 6108.

Family law 
    Divorce  Equalization and post-separation claims for money Spousal and child
    support  Underemployment.

Rouleau J.A.:

A.

OVERVIEW

[1]

The appellant, Kevin Lavie, appeals from the trial judges decision dealing
    with division of property, as well as spousal and child support following
    marriage breakdown. I would grant the appeal in part.

B.

FACTS

[2]

Kevin and Tanya Lavie began living together in 1998 and married in 2000.
    They separated in 2009.

[3]

The parties have two teenaged children born in 2001 and 2004. Following
    their separation, the parties agreed on joint custody with the children spending
    equal time with both parents.

[4]

Tanya worked as a teacher from 1998 to 2004. She left teaching after her
    second child was born. The parties agreed at that point that Tanya would not
    return to her teaching career so she could be more available to the children.
    In 2006, Tanya began operating Balls of Fun (BOF), a child play center. Based
    on the evidence of the expert evaluator, the trial judge determined Tanyas
    personal income from BOF to be $15,000 per year in 2009. She is the only
    shareholder of BOF and the evaluator estimated the value of her interest to be
    approximately $55,000.

[5]

Kevin worked as an editor for a television sports show from 1996-2012.
    He was terminated in 2012 and was given a severance payment in December 2012.
    He spent most of his career working nights up until September 2008, when he
    began working days. His income ranged from approximately $64,000 in 2009 to
    $140,000 in 2012, which sum included a substantial severance payment. The trial
    judge determined that Kevins appropriate income for 2012 was $77,923,
    excluding non-recurring income such as RSP and pension withdrawals.

[6]

In his judgment, the trial judge rejected Kevins position that he was
    entitled to an equalization payment of $64,915.97 and a post-separation
    adjustment payment of $52,669.16. Based on his assessment of the evidence, he
    concluded that Tanya was to make an equalization payment of $5,380.27 and that
    Kevin was to make a post-separation adjustment payment to Tanya of $1,440.

[7]

The trial judge also ordered Kevin to pay retroactive child and spousal
    support of $714 and $691 per month respectively commencing November 1, 2009.
    The amounts were adjusted annually based on Kevins actual income up until his
    termination at the end of 2012 and thereafter based on an imputed income of
    $70,000 per year.

[8]

With respect to Tanya, the trial judge declined to impute income equal
    to a teachers salary. Instead, based on the fact that the parties had agreed
    that Tanya should not return to teaching, he found that she was not
    intentionally underemployed. He therefore accepted the evaluators opinion that
    her estimated income at the time of separation was $15,000. The trial judge
    then adjusted that figure to $25,000 in 2011 and to $35,000 in 2012 and
    thereafter.

[9]

The judge ordered the set-off amount of child support and then added to
    this an amount of spousal support payable to Tanya to achieve equal net
    disposable incomes between the parties. This was reflected in the amount of
    support awarded. Given the uncertainty of Kevins employment prospects, the
    trial judge also provided that Kevin could seek to have the spousal support
    issue reconsidered in 2017 without the need to establish a material change in
    circumstances.

C.

ISSUES ON APPEAL

[10]

As
    at trial, Kevin represented himself on appeal. He raises over 20 grounds of
    appeal challenging virtually every aspect of the trial judges findings.
    Several grounds of appeal relate to how the trial judge conducted the hearing. This
    includes allegations that the trial judge failed to provide adequate assistance
    to Kevin as a self-represented litigant, made legal errors in several of his
    rulings, and treated Kevin unfairly in the proceeding.

[11]

Many
    other grounds relate to findings of fact made by the trial judge in determining
    the value of the parties assets and debts. Those assets and debts include the
    value of BOF, the value of Tanyas vehicle, the value of the shareholder loan
    owing to Tanya from BOF, and the responsibility for various bank and credit
    card debts.

[12]

In
    oral submissions, however, Kevin focused on three areas as follows:

1.

whether he received a fair hearing;

2.

the trial judges treatment of the BOF shareholder loan; and

3.

the trial judges imputation of income to him but not to Tanya.

I will address these issues in turn.

D.

ANALYSIS

(1)

The trial judges treatment of Kevin

[13]

From
    my review of the trial proceedings, I see no basis for concluding that Kevin
    was not afforded a fair hearing. The trial judge gave him considerable
    assistance as a self-represented party. At the outset of the hearing, the trial
    judge provided him with the Superior Court of Justice memorandum on trial procedures.
    The trial judge also provided regular assistance throughout the trial.

[14]

Kevin
    was given wide latitude in his presentation of evidence, his submissions, and in
    his cross-examinations of Tanya and her witnesses. He was not prevented from
    presenting any relevant evidence.  And in my view, the trial judge applied the
    same standards in assessing the evidence of both parties.

(2)

The value of the shareholder loan

[15]

Kevin
    also raised in oral submissions the trial judges failure to attribute any
    value to the outstanding $93,097 shareholder loan owed to Tanya by BOF. Kevin
    had listed this in his Net Family Property Statement. In his view, because the
    expert valued BOF at $55,000 using an earnings-based approach, it should
    logically follow that the shareholder loan qualifies as an asset of Tanyas
    over and above the earnings-based valuation.

[16]

I
    would dismiss this ground of appeal. The expert evidence at trial was that BOFs
    value to Tanya was $55,000 in total, which included the value of the
    shareholder loan. The expert explained that, given the amount of bank debt and
    the payment obligations of BOF for rent, employees, and the like, $55,000 was all
    that could be salvaged by Tanya if she sought to dispose of BOF. I would not
    interfere with the trial judges acceptance of this expert evidence.

(3)

Child and spousal support

[17]

Kevin
    also challenges both the child and spousal support orders. In his submission,
    the trial judge erred in imputing income to him when he was in fact unemployed,
    while imputing no additional income to Tanya. He argues that the trial judge
    ought to have found that Tanya was intentionally underemployed. Following that,
    he should have imputed income to her equal to a teachers salary in the range
    of $72,000 to $86,000 per year. Tanya held that position up until 2004 and remained
    qualified for it.

[18]

For
    her part, Tanya maintains that imputing  $70,000  in income to Kevin was not
    only reasonable, but inevitable given that he consented to imputing income to him
    in that amount. For her income, she supports the trial judges finding that no
    additional income should be imputed to her.

[19]

The
    trial judge rejected Kevins submission that income should be imputed to Tanya.
    He found that because Tanya was not intentionally underemployed, there was no
    basis to impute income to her. The trial judge explained that:

(1)

the
    opening of BOF in 2006 was a joint decision by the parties for the purpose of
    improving their family life; and

(2)

the
    advantage to the parties of having Tanya operate BOF was that it allowed Tanya
    to be more flexible with the kids.

This, in the trial judges view, supported his
    conclusion that Tanya was not intentionally underemployed.

[20]

The
    trial judge also found that Kevin agreed to the setting up of BOF. He relied on
    Kevins evidence explaining that setting up BOF was worth the sacrifices the
    family would endure. Those sacrifices would allow them to build a business that
    would be good for the future of the family and provide opportunities for them to
    work together as BOF developed. In his testimony, Kevin explained that one reason
    to create BOF was because of concerns about the job prospects in his field. The
    couple thought of BOF as a business that both he and Tanya would work in
    together.

[21]

The
    trial judge then used the joint nature of the decision to establish BOF as
    support for the conclusion that no additional income should now be imputed to
    Tanya following marriage breakdown.

[22]

For
    the reasons that follow, I agree with Kevin that the trial judge erred in
    coming to this conclusion

(a)

Tanya was intentionally under-employed

[23]

Section
    19(1)(a) of the
Federal Child Support Guidelines
, SOR/97-175 permits
    the court to impute additional income where a spouse is intentionally
    underemployed:

19

(1)
The
    court may impute such amount of income to a spouse as it considers appropriate
    in the circumstances, which circumstances include the following:


(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;

[24]

This
    section was discussed by the Court of Appeal in
Drygala v. Pauli
(2002), 61 O.R. (3d) 711 (Ont. C.A.). The trial judge referred to
Drygala
    v. Pauli
and correctly observed that in order to find intentional
    underemployment and impute income to a parent, there is no need to find a
    specific intent to evade child support obligations. He also noted that in order
    for parents to meet the legal obligation to support their children, they must
    earn what they are capable of earning.

[25]

Where
    the trial judge erred, in my view, was in concluding that Tanya was not
    intentionally underemployed. He based this conclusion the fact that opening BOF
    was a joint decision and was really for the purpose of improving their family
    life.

[26]

There
    is no requirement of bad faith or intention to evade support obligations
    inherent in intentional underemployment:
Drygala v. Pauli
, at paras. 24-37.
The reasons for
    underemployment are irrelevant. If a parent is earning less than she or he
    could be, he or she is intentionally underemployed. From the time she chose to
    start BOF and to earn $15,000 per year rather than the over $70,000 per year, Tanya
    would have earned returning to teaching, she was intentionally underemployed. There
    was also no basis on the record to find that Tanya could not resume her
    teaching career at the time of separation or at the time of trial. In fact, the
    trial judge found that her teaching career had not been compromised by her
    marriage or assumption of household responsibilities.

[27]

In
    my view, the trial judge erred by rejecting the contention that Tanya was
    intentionally under-employed.

[28]

Section
    19(1)(a) also provides that the court must consider if such intentional
    under-employment 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 [Emphasis added].

[29]

The
    trial judge found that the decision for Tanya to start BOF rather than to
    return to teaching was for the purpose of improving their family life, but
    that does not rise to the level of a requirement for the purpose of s. 19(1)(a).

[30]

The
    trial judge ought, therefore, to have concluded that s. 19(1)(a) was engaged in
    this case.

(b)

Income should be imputed to neither or both parties

[31]

Where
    s. 19(1)(a) is engaged, the court retains discretion to decide whether, and if
    so, how much, income to impute to the under-employed spouse.

[32]

Here
    too,
Drygala v. Pauli
provides guidance. When imputing income based on
    intentional under- employment or unemployment, a court must consider what is
    reasonable in the circumstances. The factors to be considered have been stated
    in a number of cases as age, education, experience, skills and health of the
    parent:  para. 45.

[33]

I
    acknowledge that the record supports the judges finding that Tanyas decision
    not to return to her teaching position and to work on building up BOF was made
    jointly by the parties. That alone, however, does not justify imputing $70,000
    in additional income to Kevin and no additional income to Tanya.

[34]

When
    the parties made the decision that Tanya would not return to teaching, Tanya
    had primary responsibility for the young children and the parties were
    maintaining a single combined household. Further, as Kevin testified, he was
    concerned about his ability to maintain his employment in his industry and
    considered BOF a possible way to provide for the whole family.

[35]

By
    the time of trial, the situation had changed. The parties were now maintaining
    two separate households with the additional total expenses that this entails. And,
    as found by the trial judge, the parties were now sharing parenting
    responsibilities equally such that the children could only directly benefit
    from Tanyas extra time at home while staying with her. For the other half of
    the time, they would benefit equally from Kevins ability to work fewer hours. It
    is also relevant that while Kevin may have chosen to support building a
    business from which he too could ultimately benefit, after separation, he could
    no longer benefit from the business growth.

[36]

Taking
    all of this into account, in my view it is appropriate to either impute
    additional income to both parties or to neither of them.

[37]

While
    Kevin was still employed, and given the appropriateness of a period of
    adjustment to allow Tanya time to reengage in teaching or some other more
    remunerative form of employment, I would impute no additional income to Tanya. I
    would, therefore, leave the trial judges support order for this period intact.

[38]

However,
    once Kevin became
unintentionally
unemployed, it was not appropriate
    to impute to him his former full salary while at the same time imputing no
    additional income to Tanya.  For the period from January 1, 2013, I would
    impute 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 spousal or
    child support.

[39]

In
    the result, I would vary the judgment to provide that as of January 1, 2013 there
    is no spousal or child support owing by either party. I would also modify the
    provision that Kevin can bring a review of spousal support after October 5,
    2017 to provide that either party may bring a review of spousal or child
    support based on any relevant change in circumstances since trial. The parties
    need not meet the threshold of a material change in circumstances. A qualifying
    change would include that either party now has a stronger claim for child or
    spousal support based on bona fide but unsuccessful efforts to secure
    employment income beyond that earned at trial.

E.

ADDITIONAL GROUNDS OF APPEAL

[40]

Kevin
    raises a number of additional grounds of appeal. These are based on the trial
    judges factual findings, are entitled to deference, and I see no reason to
    intervene. I would therefore dismiss the balance of the grounds of appeal.

F.

FRESH EVIDENCE

[41]

Both
    Tanya and Kevin have tendered proposed fresh evidence. In my view, the fresh
    evidence would not have affected the outcome of the trial. To the extent that
    it involves changes in circumstances since the trial, the fresh evidence is best
    considered in a future motion to vary the support obligations. As noted, the
    trial judge specifically contemplated that a review may be appropriate any time
    from October 2017 onward.

G.

CONCLUSION

[42]

In
    conclusion, I would allow the appeal in part to vary the child and spousal support
    obligations. I would reduce both spousal and child support to zero as of
    January 1, 2013 and adjust the amount of the arrears ordered to reflect this
    decision. I would also amend the review provision in paragraph 14 of the order
    in the manner I have set out in these reasons. In the circumstances, I would
    make no award as to costs.

Paul Rouleau J.A.

I agree Robert J.
    Sharpe

I agree Fairburn
    J.A.

Released: January 10, 2018


