Alberta Court of Appeal: Signs That Changes May Be Needed When Imputing A Parent’s Income
July 9, 2020
A recent decision from the Court of Appeal of Alberta challenges some long-standing guidelines around child support, and in particular, the imputation of income when one parent does not earn as much money as they are capable of. The decision, which deals with two parents who are (or were) high-income earners sheds light on how the laws around child support and imputed income may develop.
A Brief Relationship
The mother and father had a brief romantic relationship in 2011. The relationship resulted in the birth of a child, who was seven-years-old at the time of the hearing. Both of the parents had histories of being high earners and had significant personal assets. The father was a manager at a bank and made between $112,000 and $157,000 per year from 2016-2018. He was projected to make $92,000 in 2019. In addition to his income, he had a net worth of about $1.2 million.
The mother worked as a lawyer at a large law firm in New York and moved to Canada when she was laid off in 2008. Upon her return to Calgary, she worked as a lawyer with a major energy producer but was laid off again. Her income had gone up and down over the years, with a range of $88,000 on the low end to $345,000 on the high end. She expected to make no money in 2019 but had assets worth about $1.9 million.
An Application to Vary Child Support
In 2017 the father successfully applied for shared parenting. Then in 2019, he applied for a variation of retroactive and ongoing child support. The issues before the Court were to determine the amount of child support payable as well as how a shared parenting arrangement may impact that.
The mother was not employed at the time of the trial, and the notion of imputed income played a significant role throughout the various stages of the case. A 2001 decision (“Hunt”) from the Court of Appeal of Alberta is the leading case in the province in regards to imputing income when a parent is intentionally unemployed or underemployed. The decision interpreted section 19(1)(a) of the Alberta Child Support Guidelines, which state,
19(1) The court may impute the amount of income to a parent that it considers appropriate in the circumstances, and those circumstances include the following:
(a) the parent is intentionally under‑employed or unemployed, except where the under‑employment or unemployment is required by the needs of a child of the parents or any child under the age of majority or by the reasonable educational or health needs of the parent;
The decision in Hunt expanded on the Guidelines, adding that failure to take employment is not enough on its own to impute income. Instead, there must exist “either proof of a specific intention to undermine or avoid support obligations, or circumstances which permit the court to infer that the intention of the obligor is to undermine or avoid his or her support obligations.” This interpretation is unique to Alberta.
The lower court did not follow Hunt in determining that child support could be discontinued, finding the mother’s failure to find work to be “unreasonable” but not mentioning the issue of “bad faith.” The Court of Appeal pointed this out and noted that Alberta is the only province to require bad faith in addition to unreasonableness on the part of the underemployed parent. The Court concluded its decision by stating that the decision in Hunt was 19 years old and that perhaps it was time to reconsider the precedent.
Having said that, the Court sided with the father in his request to terminate support, finding that the child would enjoy a similar standard of living with or without child support payments, given that his mother had a good deal of independent wealth even in the absence of a steady income.
If you have questions about spousal or child support rights or obligations, reach out to the lawyers at HMC Lawyers at 1-800-480-3534 or contact us online. We represent clients primarily in Calgary and surrounding areas in a variety of Family Law matters.