The Importance of Financial Disclosure in Ontario Family Law

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Proper financial disclosure is the cornerstone of the Canadian court’s ability to achieve just results for the parties. It also allows both parties to fully understand each other’s financial circumstances, which is essential for negotiating a fair settlement or for a court to make an informed decision. One party may be disadvantaged without proper disclosure, leading to unfair outcomes and prolonged legal battles. Additionally, financial disclosure promotes the efficient resolution of disputes by reducing the likelihood of surprises or hidden assets emerging later in the process. 

This blog will discuss the essential principles regarding financial disclosure in Ontario family law proceedings.

Financial Disclosure in Ontario’s Family Law Rules

Ontario’s Family Law Rules govern family law proceedings in the province, outlining procedures for divorce, decision-making responsibility (child custody), and child and spousal support. They provide a framework for efficient and fair resolution of family law matters, including requirements for financial disclosure, court forms, and rules for conducting hearings and trials.

Rule 13 contains provisions relating to financial disclosure. Generally, the Rule requires that parties provide comprehensive disclosure and that parties update the disclosure regularly. It also includes the requirement that any party bringing a claim for spousal support, child support, or possession of the matrimonial property must file and serve a financial statement with the claim. It also provides guidance on the forms to use in which situations, summarized below: 

  • Form 13: when there is a claim for support without a property claim or a claim for exclusive possession of the matrimonial home.
  • Form 13.1: when there is a property claim or a claim for exclusive possession of the matrimonial home, with or without a support claim. 
  • Form 13A: a certificate of financial disclosure that confirms the service of documents required under subrule (3.1), (3.3), (3.4), or (5.0.1). 
  • Form 13B: a net family property statement used in property claims under Part I of the Family Law Act. The form is used to calculate each party’s net family property.
  • Form 13C: a joint comparison of net family property statements used when parties agree to compare their net family properties.

Lastly, the Rule allows the court to reject a claim or any related documents if not filed with the appropriate form. 

What is Required for Proper Financial Disclosure?

Proper financial disclosure involves providing all relevant documentation to ensure a clear and accurate understanding of each party’s financial situation. This requirement is ongoing and must be updated whenever material changes occur.

General Disclosure Requirements

Subrule 13(3.1) outlines the specific documents required for financial disclosure in claims for spousal and child support.

Income Documentation 

Income documentation includes personal income tax returns and notices of assessment or reassessment for the past three years, copies of a party’s record of employment, and statements of benefits or income that a party is entitled to receive from current or former employers.

Extraordinary Expenses 

Extraordinary expenses must also be disclosed, including proof of the amount of any extraordinary expenses related to child support claims, such as childcare costs, medical expenses, or educational fees.

Disclosure Requirements and Child Support Guidelines 

These Guidelines mandate detailed income and expense documentation to ensure compliance with support calculations. This includes providing income information for all relevant sources and verifying extraordinary expenses under the guidelines.

Property and Asset Disclosure 

Property and asset disclosure involves providing details of any real estate, investments, or other significant financial assets, bank statements, mortgage documents, and other proof of liabilities.

Special Requirements for Motions to Change Support

When bringing a motion to change support, the Rule requires the disclosure of proof of income for the years relevant to the arrears, including notices of assessment or reassessment and tax returns. Documentation supporting any claims of changes in financial circumstances must also be provided.

Ongoing Disclosure Obligations

Financial disclosure is not a one-time requirement. Parties must provide updated disclosure throughout the legal proceedings whenever material changes occur in their financial circumstances. For example, if a party gains new financial assets or incurs significant liabilities, these changes must be disclosed promptly to avoid breaching disclosure requirements.

Failure to update financial disclosure can result in significant consequences, including dismissing claims, striking out of filed documents, or contempt orders. Courts also have the authority to order the production of specific documents, ensuring transparency in financial matters.

The Role of Form 13A

Form 13A serves as a certificate of financial disclosure, confirming that all required documents have been served in compliance with Rule 13. This form ensures that parties remain accountable for their disclosure obligations and provides a mechanism for tracking compliance.

Consequences for Insufficient Financial Disclosure

The Family Law Rules provide mechanisms for addressing insufficient financial disclosure. If a party believes the opposing party has not provided adequate information, they can request additional disclosure. The opposing party is required to respond within seven days. Failure to do so may result in court orders compelling disclosure or imposing sanctions.

Court-Ordered Sanctions

Courts have several options for addressing non-compliance with financial disclosure requirements. These include dismissing claims if a party fails to provide adequate disclosure, striking out documents filed by a non-compliant party, and issuing contempt orders against parties who breach disclosure requirements, which may include fines or other penalties. These consequences underscore the importance of fulfilling disclosure obligations promptly and comprehensively.

Promoting Fairness and Efficiency

Financial disclosure is vital in promoting fairness and efficiency in family law proceedings. By providing a clear picture of each party’s financial circumstances, disclosure helps facilitate settlement by enabling parties to negotiate fair settlements and reducing the need for prolonged litigation. Proper disclosure minimizes the risk of hidden assets emerging later in the process, ensuring a more predictable outcome. Additionally, transparent financial disclosure streamlines legal proceedings, allowing courts to focus on substantive issues rather than procedural disputes.

Best Practices for Financial Disclosure

To ensure compliance with financial disclosure requirements, parties should consult a lawyer for legal advice, essential for understanding disclosure obligations and avoiding potential pitfalls. Keeping organized income, assets, and liabilities records simplifies the disclosure process. Proactively updating financial disclosures whenever material changes occur demonstrates good faith and compliance. Ensuring that the appropriate forms are filed under Rule 13 reduces the risk of rejection by the court.

The Importance of Adhering to Financial Disclosure Requirements 

Financial disclosure is a critical component of family law proceedings in Ontario. It ensures fairness, promotes efficiency, and enables courts to make informed decisions. By adhering to the requirements outlined in Rule 13 of the Family Law Rules, parties can avoid unnecessary disputes and achieve equitable outcomes.

Windsor Family Lawyers Helping You Navigate Complex Family Law Matters

Our experienced family lawyers at Johnson Miller Family Lawyers can provide reliable guidance and representation in complex family law matters. From tailored services for entrepreneurs to dealing with high-asset divorce and hidden assets, our family law lawyers will be with you every step. To see you through the best possible outcome, our team will help you navigate a complex, confusing, and often emotionally difficult process. For questions only a family law lawyer can answer, contact Johnson Miller Family Lawyers in Windsor at 519.973.1500 or online.