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Family law is often characterized by its intricate interplay of emotions, relationships, and legal intricacies. However, at the core lies the fundamental principles of fairness and equity, which are particularly important in financial matters. Amidst the emotional turmoil involved in a separation or divorce, questions and disputes often arise regarding the division of assets, liabilities, and financial support arrangements. In such moments, financial transparency becomes paramount.
This blog will explore financial disclosure obligations and why sufficient disclosure is required to know what must be divided between the parties and achieve just outcomes.
Financial Disclosure Obligations in Family Law
If you are a party to a family law proceeding, your financial disclosure obligation is a legal requirement that means you need to provide the other party with a full picture of your financial position. This obligation applies regardless of whether your matter is in court or not. In Ontario, section 13 of the Family Law Rules outlines the particular rules surrounding financial disclosure obligations.
Although parties are required to disclose financial information immediately and on an ongoing basis, these obligations are not infinite. This is an issue that is often raised when one party is faced with excessive disclosure requests. As such, the courts have determined that there are three elements to consider when determining whether a disclosure request is appropriate:
- The burden of the request on the opposing party;
- The relevance between the disclosure request and the issues involved in the matter; and
- The cost to obtain the requested disclosure in comparison to the importance of the disclosure.
Consequences for Failing to Provide Full Disclosure
If it is determined that a party is attempting to conceal assets or avoid sharing the value of particular assets to the other party, disputes can quickly escalate. Further, if one or both parties do not provide full disclosure, they may face serious consequences, such as delays, additional expenses, reduced credibility, or cost consequences at trial.
It is important to note that skipping over financial disclosure cannot be negotiated away even in an amicable separation. Parties are entitled to be aware of the other person’s financial situation to make informed decisions regarding the terms of separation or divorce and your future. Ensuring that both parties have full and frank financial disclosure also mitigates the chances that your agreements will be challenged.
Wife Seeks Order for Husband to Comply With Financial Disclosure Requests
In the matter of P.M. v. B.M., the respondent-wife (the “wife”) moved for an order that the applicant husband (the “husband”) produce answers to his undertakings, among other things. The husband moved for an order requiring the wife to provide “unredacted and unaltered” credit card statements.
Referencing prior case law and principles of financial disclosure, the Court noted that:
“[t]he most basic obligation in family law is the duty to disclose financial information. That duty is immediate and ongoing. Failure to abide by that duty frustrates the administration of justice, causes delay, impedes the progress of the proceeding, disadvantages the other side, and wastes judicial resources.”
The wife made several disclosure requests, which the Court declined to require the husband to comply with. However, there were certain requests the Court ordered to be fulfilled.
Compliance With Pay Stub Request “Insignificant” Burden
Turning to the issues, the Court first addressed the wife’s requests for the husband to produce one full year of pay stubs. While there was no information in the decision regarding what the husband did for work, he refused to fulfill this request because it was “overly broad” and offered to provide his most recent three pay stubs.
The Court, however, disagreed with this argument and found that the time and cost to provide the additional pay stubs was “negligible” and the burden on him to comply with such a request was “insignificant.”
Court Allows Wife’s Motion in Part
The wife also sought copies of statements for a joint line of credit for “as far back as possible.” The account was registered against the parties’ matrimonial home, and statements for an account used to invest money on behalf of the husband’s holding company. However, the Court determined that the wife could also obtain the joint line of credit records herself and refused to order the husband to provide such disclosure.
The Court also declined to order the husband to disclose a breakdown of all child support payments made since the separation, as he had already confirmed that no payments had been made.
Overall, the Court partially granted the wife’s motion, ordering that certain disclosure requests be fulfilled.
Husband’s Motion is Dismissed
The Court then turned to the husband’s financial disclosure requests. However, given the “very serious allegations of domestic violence in this case” combined with the husband’s criminal history and peace bond and probation orders made against him, the Court saw nothing unreasonable regarding the wife’s desire to not “disclose the precise locations of the places where she makes purchases.” The Court did note that the redactions to her credit card statements must be “as limited as possible.”
Contact Johnson Miller Family Lawyers for Advice on Disclosure Obligations and Property Division
At Johnson Miller Family Lawyers in Windsor, our trusted team of separation and divorce lawyers understand the importance of disclosure in complex property division matters. Whether you are seeking additional disclosure from an opposing party, or want to better understand your disclosure obligations, the team at Johnson Miller Family Lawyers can help. To speak with one of our team members regarding your property division matter, contact us at 519.973.1500 or reach out to us online.
