Vancouver Calgary Self Employed Support Lawyers handle cases involving business owners, entrepreneurs, professionals and proprietors. Our experienced and savvy Vancouver Calgary Self Employed Support Lawyers are skilled in finding, hidden income, diverted income, inappropriate expenses, cash payments, non-arm’s length payments and the like. We also defend business owners to ensure they keep enough pre-tax profits in their business to sustain it and ensure the “goose that lays the golden egg” thrives after separation.
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Our Vancouver Calgary Self Employed Support Lawyers goal is to ensure fair child and spousal support is paid and to ensure both the paying and receiving spouses work to their real capacity. We are a multiple winner of Top Choice Awards Best Family Law Firm. In Vancouver and we have a rapidly expanding family law office in Calgary with resident Calgary lawyers based there. You can meet with us in Vancouver, Calgary, Surrey, Kelowna, Fort St John and Richmond, BC.
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Recent victories for our clients include, obtaining orders jailing a husband for lying about his income, getting awards of specials costs against spouses who his income, having a forensic audit ordered, executing an Anton Pillar “raid” on a business to find the “smoking gun” documents and more. We focus on medium to high net worth family financial cases including calculation of income, pre-tax profit analysis, business valuations on a multiple of earnings basis and sorting out complex family business structures including estate freezes and trusts. Click here to get a general explanation of how spousal support works.
A recent case sets out the difficulties a court faces when a business owner or other self employed person is less than candid about their income:
41 With respect to the calculation of income for Guideline chart purposes, there is information relative to his outside employment that makes that process, to that limited extent, quite easy, and s. 16 of the Guidelines can be relied upon. However, it is Mr.’s participation in the 2 businesses, WCBR and Specialty, and his manipulative accounting with respect to same, that makes the task of determining his real income very difficult, and forces the Court to have regard to ss. 17 (primarily 17(1)(c) and (2)), 18 and 19 (primarily 19(1)(f), (g) and (2)) of the Guidelines.
42 There are a number of principles to examine, and then a couple of options for the calculation process.
- Principles
43 There is ample authority for attributing income to a parent who expenses personal costs through his company(ies): Sarafinchin v. Sarafinchin (2000), 189 D.L.R. (4th) 741 (Ont. S.C.J.) (Sachs J.). Hauger points out the following additional authorities, and there are undoubtedly more: Rudachyk v. Rudachyk (1999), 180 Sask. R. 73 (Sask. C.A.);1 Millar v. Millar ((October 2, 1998)), Doc. New Westminster D42071 (B.C. Master), 1998 CarswellBC 2371; Y. (D.) v. Y. (H.) (1998), 43 R.F.L. (4th) 408 (P.E.I. T.D. [In Chambers]); Hill v. Hill (1999), 48 R.F.L. (4th) 110 (Sask. Q.B.), where the court disallowed a farming loss as a deduction from his income as he was farming as a hobby; Holtby v. Holtby (1997), 30 R.F.L. (4th) 70 (Ont. Fam. Ct.) (Aston J.), where the court refused to recognize the deduction of certain expenses of the payor’s farming business because there was a personal nature to them – including interest on his mortgage, property tax deductions relating to a personal residence, and salaries perhaps payable to his current wife; Jaasma v. Jaasma (1999), 3 R.F.L. (5th) 74 (Alta. Q.B.) (Lee J.), where one half of the capital cost allowance (CCA) and depreciation were not allowed as there was no evidence that it was anything more than an income tax deduction nor that the property was actually going to be replaced; Roy v. Roy (1999), 1999 SKQB 122 (Sask. Q.B.); Ashworth v. Ashworth (1999), 1999 SKQB 227 (Sask. Q.B.), where the court found that the financial statements of the payor did not accurately reflect his real income, and excluded CCA and expenditures for stockpiling and the exorbitant purchase of farm equipment; Shaw v. Shaw (1997), 120 Man. R. (2d) 310 (Man. Q.B.), and 6 other cases (see Hauger at para. 45), here CCA on farm equipment was not allowed; and Boehm v. Boehm ((April 3, 1998)), Doc. Yorkton DIV 02299/95 (Sask. Q.B.), 1998 CarswellSask 147.
44 In Elliott v. Elliott (1997), 30 R.F.L. (4th) 339 (Alta. Q.B.), referenced by Vertes J. in Williams and Nash J. in Ewaniw, Rawlins J. stated (at para. 17) that the Court must meticulously examine the tax returns of self-employed employers, and I agree:
Now …. courts are faced with greater number of self-employed payors, claiming lack of ability to pay based on their tax returns. When faced with such a party, the court must meticulously examine the financial records placed before the court when determining ability to pay. In particular where the payor is self-employed and operates the business, the net income reported on their personal income tax form is not necessarily an accurate reflection of their personal income or their ability to pay for support purposes.
45 Of relevance to this case, Sarafinchin is also authority for a number of propositions, including: making adjustments by way of “add backs” under s. 18(1)(a) and (2) (at para. 8 “adding back the salaries, wages or other payments of benefits paid to or on behalf of people with whom the corporation does not deal at arm’s length, unless the spouse establishes that the payments were reasonable in the circumstances” – see also para. 52) relevant to Specialty and WCBR; the imputation of income under s. 19(1)(f), where a parent fails to provide the income information required under law; rejecting a husband’s “catch me if you can” (para. 14) disclosure of income, based on the premises that (para. 16):
Child support is the right of the child, not just the obligation of the parent. Children are the real victims of any marriage breakdown. Their rights should not be subject to game playing by their parents.;
Our top rated* Vancouver Calgary Self Employed Support Lawyers will help ensure both parents do their part to properly meet their spousal support and child support obligations. Call us early on in a case to get a plan to ensure the true income of a self employed spouse is used.
