Importance of Financial Disclosure in Family Law

Summary of the decision

In Watson v. Zita, 2026 ONSC 2466, released April 24, 2026, the case concerns child support for a child, J.Z., whose mother died in January 2024. The applicant is the child’s maternal aunt and has been the child’s primary caregiver since January 2023. The respondent father had already consented to primary parenting to the applicant by consent order, so the remaining issue was mainly the amount of child support he should pay.  

The respondent’s Answer had been struck, so the matter proceeded as an uncontested trial. The judge accepted that the applicant was entitled to child support. The central question was whether the court should accept the respondent’s reported low income or impute income to him for child support purposes.  

The respondent had disclosed Notices of Assessment showing incomes of $24,589 in 2022, $32,879 in 2023, and $21,667 in 2024. He also claimed to be unemployed from February 2025 onward and receiving Ontario Works, with an income of about $700 per month. However, the applicant provided evidence suggesting he had been working at various points in 2024 and 2025, including text messages in which he stated he had a new job, would be working the next morning, had been working for months, was busy from 9 to 5, and was working in landscaping. There was also evidence that he posted a rental/accommodation ad with a stated monthly budget of $2,300, which undermined his claim that he lived only on Ontario Works.  

The court reviewed the law on imputing income under s. 19(1) of the Child Support Guidelines, especially where a parent is intentionally unemployed or underemployed, or fails to provide required income disclosure. The judge emphasized that imputing income is discretionary, but there must be some evidentiary basis for the amount imputed. The court also relied on principles that poor financial disclosure, suspicious lifestyle evidence, possible undeclared cash income, and failure to explain unemployment can justify the imputation of income.  

The judge found the respondent’s disclosure inadequate. He had failed to provide the documents ordered by the court, including updated financial disclosure, tax returns, T4s, records of employment, job applications, employment contracts, social assistance applications, and evidence explaining any inability to earn at least minimum wage. Because of this failure, along with evidence that he may have been working despite claiming Ontario Works, the court imputed income to him at the minimum wage from 2024 onward.  

For support, the court accepted the respondent’s 2023 income of $32,879, resulting in $3,091 in 2023 child support. For 2024 and 2025, the court calculated support based on minimum wage at 38 hours per week. The court ordered retroactive and retrospective child support totalling $11,088.63 up to and including April 2026. The respondent was also ordered to pay ongoing table child support of $281.54 per month, starting May 1, 2026.  

The court also awarded costs. The applicant sought full recovery of $16,085.55 in costs. The judge agreed that the respondent’s conduct was unreasonable, including his failure to provide disclosure, his breach of a disclosure order, his late acceptance of the parenting offer, and his abandonment of the litigation. However, the judge found that his conduct did not amount to bad faith. The court awarded enhanced but reduced costs of $14,690, inclusive of HST.  

Analysis

This decision is mainly important because it shows how seriously Ontario family courts treat financial disclosure in child support cases. The respondent’s reported income was not automatically accepted just because he produced Notices of Assessment or said he was on Ontario Works. The court looked at the broader factual picture: his communications about working, his lifestyle evidence, his failure to provide records, and his lack of explanation for reduced income.

The strongest part of the applicant’s case was not one single piece of evidence, but the pattern. The respondent claimed a very low income, yet his own messages suggested employment, and his rental-budget post suggested access to more money than he disclosed. That allowed the court to draw an adverse inference. In family law, this matters because child support is the right of the child, and a payor parent cannot avoid support simply by withholding information or giving incomplete disclosure.

The decision also shows that receiving social assistance does not automatically prove inability to work. The court found Ontario Works relevant but not conclusive. A parent claiming they cannot earn minimum wage may need to provide credible evidence, such as medical records, job search records, employment records, or other documents explaining why they cannot work.

The imputation was also relatively conservative. The applicant suggested a minimum wage from 2023 onward, but the judge accepted the respondent’s actual 2023 income and imputed income only from 2024 onward. This makes the decision appear measured rather than punitive. The court did not invent a high income. It used a minimum-wage benchmark, which was supported by evidence that the respondent had at least some capacity to work and had failed to prove otherwise.

The costs award reinforces the same theme. The court did not find bad faith, but it did find unreasonable litigation conduct. That distinction matters. Bad faith is a higher threshold, but even without it, a party can still face enhanced costs if their conduct causes unnecessary litigation, delays, or expenses. Here, the respondent’s failure to provide disclosure and his late/poor participation increased the applicant’s legal burden, so the court ordered significant costs against him.

Overall, the case stands for a practical principle: a parent cannot avoid child support by claiming poverty while failing to provide proper disclosure, and while other evidence suggests employment or access to money. The court will use adverse inferences and impute income where necessary to protect the child’s entitlement to support.

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