Court Denies Extensive Disclosure Request Despite Default on Support Payments

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When people are involved in high-asset separation or divorce, it’s natural that the parties may be concerned about hidden assets or that the other party is not being honest about how much income they earn. Sometimes people might not be forthcoming about their assets or income in order to avoid paying the appropriate amount of spousal support or child support as they would otherwise be obliged to do. 

Generally, there is certain financial disclosure is required from both parties during a divorce. However, a recent decision from the Ontario Superior Court of Justice confirms that even a party who has failed to keep up with some of their child support or spousal support payments will not automatically be required to provide further disclosure regarding their finances or employment unless directly related to the matter. 

High earning father ordered to pay significant support payments

In the case of Hagopian v. Kechichian, the parties were married on September 1, 1996, and separated in the fall of 2015. They had two children together who, at the time of the trial, were 23 and 17 years old. The parties were living in the United States at the date of separation, and the father remained there while the mother moved back to Canada with the children. 

The father earned a significant income, earning over $2,000,000.00 in 2021. His salary made up approximately 10% of his annual income, while the rest of his earnings came from annual bonuses and stocks throughout the year. The mother’s income was considerably less, as she earned approximately $10,407.00 in 2021. 

In September 2018, the father was ordered to pay child support to the mother in the amount of $14,000.00 per month, plus section 7 expenses of $36,000.00 per year. He was also required to pay $32,000.00 per month in spousal support. His total monthly support payments were set at $49,000.00 per month, which increased to $54,000.00 per month when the parties’ eldest child began attending university in 2019.

Father fails to comply with disclosure orders

In July 2019, the Court ordered the father to produce financial documentation, including bank statements, credit card statements, E-Trade statements, income tax returns, and IRS documents within 60 days, which he failed to do. In December 2021, another Judge ordered that the father comply with the July 2019 order, which again was not complied with. 

By the summer of 2022,  the father had missed his two consecutive support payments due to, what he stated as, the majority of his income being held in his E-Trade account which was frozen while employees were in a blackout period to prevent insider trading. 

The father was again ordered to provide thorough financial disclosure, and replied with limited information showing his income to date over the year. The documentation indicated that by August 2022 his salary earnings were $290,461.00, he had received $909,702.00 in restricted stock, and bonuses of $537,537.00, all of which was in USD, totalling approximately $2.24 million. However, the father stated that he had not been able to pay his required support payments because he only had access to his salary earnings as of August.

Mother believes father can pay support but is choosing not to 

The mother told the court that she believed the father had the means to meet his support obligations, but had used the blackout period for his stock account as an excuse not to. She requested extensive disclosure in order to prove this. 

The father argued that he had demonstrated “herculean” efforts to try to comply with the court orders and had provided sufficient disclosure to demonstrate that. He told the court that 70% of his net income goes towards paying support.

The disclosure sought by the mother was lengthy and included all documents related to all of his payments, income, stock options available to exercise, healthcare benefits summary, executive health plan details, work credit card expense reports, work expense reimbursement details, pension plan summary, 401-K statements, and more. 

Court rejects argument that further financial disclosure is required 

The Court confirmed that the father had a history of not complying with court orders, and a subsequent daily fine in the amount of $700 was imposed on him. However, the Court was also satisfied with the father’s argument that a blackout period prevented him from accessing funds outside of his salary. 

The court referenced a 2021 decision from the Ontario Superior Court of Justice in Tonogai v. Tonogai, which stated:

“A party seeking to have the other party produce information not automatically required by the Rules must, as a preliminary issue, establish that there is a probative connection between the information requested and the issues to be determined at trial.”

The Court had to determine whether each requested type of documentation could be relevant to the issue of support claims by the mother. Ultimately, the Court decided that the father had already provided the most important documentation, but also ordered that his stock agreements be provided too. The Court declined many of the mother’s disclosure requests relating to the father’s health benefits and expense reports as these were deemed irrelevant to the issue at bar, and only the information that illustrated what income the father would receive and has actually received, were required. 

Howie Johnson Barristers & Solicitors can assist you with child and spousal support orders

The family law team at Howie Johnson Barristers & Solicitors in Windsor has extensive experience assisting clients with a variety of family law-related matters, including divorce, spousal support, child support. Our lawyers can help navigate difficult situations with respect to high net worth parties and missed support payments. To speak with a lawyer regarding your unique circumstances, please contact us online or by phone at 519-973-1500 to book an initial consultation and see how we can assist you today.

 

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