Section 19(1) of the Federal Child Support Guidelines (FCSG) permits the court to impute income if it appears that income has been diverted and that diversion affects the level of support payable under the FCSG, and/or if the spouse has failed to provide income information when under a legal obligation to do so.

In the case Bodine-Shah v. Shah 2014 BCCA 191, the Court of Appeal noted the payor’s lack of financial disclosure, the inadequacy and unreliability of his explanation for the significant difference between his pre- and post-separation return on gross revenue, the inability of the accountant to explain the payor’s business expenses, and the appellant’s post-separation lifestyle and payment of expenses of his girlfriend’s company.

The Court of Appeal emphasized:  “This Court has forewarned litigants of the potential, for those who fail or refuse to make full and frank disclosure of their financial circumstances, of having adverse or negative inferences drawn against them with attendant consequences that may include the imputation of income (see: Poursadeghian v. Hashemi-Dahaj, 2010 BCCA 453, 10 B.C.L.R. (5th) 102 (B.C. C.A.), where the payor was found to have provided an inadequate explanation or to have given unreliable evidence in support of his submission on income; Reis v. Bucholtz, 2010 BCCA 115, 3 B.C.L.R. (5th) 71 (B.C. C.A.), in which the judge imputed income and denied re-opening of the trial on the basis that the payor failed to disclose or adduce evidence as to his income from renting his farm out; and Motyka v. Motyka, 2001 BCCA 18 (B.C. C.A.) at para. 16, (2001), 83 B.C.L.R. (3d) 339 (B.C. C.A.), in which the payor’s failure to make full financial disclosure resulted in imputation of income based on his lifestyle, monthly expenses, and income during the marriage).”