“As I have said, under the Guidelines, child support is calculated on the payor’s total income for income tax purposes. Lifestyle is clearly not a type of income, receipt or benefit included in total income. Canadians are not taxed on lifestyle.
Equally clearly, however, a payor’s lifestyle often will be relevant to whether a court may impute income under s. 19(1) of the Guidelines. For example, it may be apparent from lifestyle that a payor is receiving undeclared income because he or she has historically worked, lives comfortably with the usual trappings, and yet declares minimal income for tax or child support purposes. In such a case, the recipient who calls evidence of the payor’s lifestyle will ask the court to draw the reasonable inference that the payor must have a greater income than he or she has disclosed.
This occurred in Davids v. Davids, [1998] O.J. No. 2859, 66 O.T.C. 321 (Gen. Div.), where a chartered accountant was able to demonstrate from the husband’s financial data that he was receiving income from a source he could or would not explain. Given the absence of any explanation, the court drew an inference that the husband’s earnings were more than reported. Similarly, in Biamonte v. Biamonte, [1998] O.J. No. 541, 36 R.F.L. (4th) 349 (Gen. Div.), based on evidence of the parties’ lifestyle, income was imputed to a husband who was shown to have a cash component to his restaurant business in addition to his declared income. While these cases demonstrate that a party’s lifestyle can inform the question of whether the payor has diverted income, or underreported income, lifestyle is not a stand-alone ground for imputing income.
On this issue, I conclude that lifestyle is not income, but rather evidence from which an inference may be drawn that the payor has undisclosed income that may be imputed for the purpose of determining child support.”