Imputing income for support is an issue that arises time and again in my practice so I pay close attention to new case law on the matter.
Ruffolo v. David, 2016 ONSC 754 is one such case. The father’s income was imputed at trial. He later brought a motion to vary support and presented new evidence (tax returns, notices of assessment, and an accountants’ report) that was not available at trial but obviously should have been. The motions court found a material change in circumstances and reduced his support obligations. Consequently, the mother owed the father some $80,000.00 in overpayments and appealed the motion court’s decision.
The appeal was allowed. The father failed to establish a material change in circumstances. Trang v. Trang (2013) 29 R.F.L. (7th) 364 (Ont. S.C.J.) was cited. It provides that a party seeking to vary an imputed income faces a difficult burden. They must show the factors considered when income was imputed and whether those factors have changed; it is not enough simply to present evidence of a declared income. Otherwise this would benefit the payor at the recipient’s expense, as the payor could wait and see whether income was imputed and, if so, re-litigate the issue using their declared income. The onus should not fall on the recipient to show why income should still be imputed.
The payor must address why income had to be imputed in the first place. They must show a change in circumstances establishing either: (a) it is no longer necessary or appropriate to impute income and their representations should now be accepted, or (b) even if income should still be imputed, a change in circumstances results in the imputation of a different amount.
The Court comments on the meaning of a material change. A material change likely exists where, if the facts were known at the time of the initial order, a different result would have followed. Willick v. Willick,  3 S.C.R. 670 was cited for the principle that if the matter relied on as constituting the material change was known when the initial order was made, it cannot be relied upon as a basis for variation.
The main take away point from Ruffolo is this: tell your clients to prepare their financial statements right the first time.