Key Considerations when Obtaining BC Family Law Disclosure
Obtaining Vancouver Financial Disclosure explained by MacLean Law, Vancouver’s top rated and award winning family law firm. Contact Western Canada’s largest family law firm. 1-877-602-9900.
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Obtaining BC Family Law Disclosure
Without proper financial disclosure, it is impossible to determine what constitutes a fair distribution of family property and debt or what amounts to a proper amount of child support or spousal support. For this reason non-disclosure of assets is often referred to as the cancer of matrimonial litigation. Our top rated family lawyers know that Obtaining BC Family Law Disclosure is key to a fair settlement or proper trial judgment. There are several strategies our lawyers use in obtaining BC family law disclosure which relate to documents and witnesses that we will share with you once we act for you.
Stopping The Cancer of Non-Disclosure and Obtaining Full BC Family Law Disclosure
“Non-disclosure of assets is the cancer of matrimonial property litigation. It discourages settlement or promotes settlements which are inadequate. It increases the time and expense of litigation. The prolonged stress of unnecessary battle may lead weary and drained women simply to give up and walk away with only a share of the assets they know about, taking with them the bitter aftertaste of a reasonably‑based suspicion that justice was not done. Non‑disclosure also has a tendency to deprive children of proper support.” Supreme Court of British Columbia, Cunha v da Cunha, Mr. Justice Fraser
Duty Of Making Full BC Family Law Financial Disclosure
So what are the rules relating to obtaining BC family law disclosure?
What happens if a person fails to make full financial disclosure?
Some judges fine the non disclosing party, some judges strike the pleadings of the guilty party, some judges give 100% of the known assets to the innocent party. In a recent win by Lorne N MacLean, QC on non disclosure on an interim support application, a forensic audit was ordered after MacLean shredded the credibility of the husband.
What is very clear is that there must be a zero tolerance for parties trying to hide assets or income and the financial shenanigans of non-disclosure.
Section 5 of the Family Law act imposes a duty on each party to make “full and true disclosure”, whether the parties are in court or not. If a party fails to comply, section 213 can be used to enforce inadequate disclosure.
Under s-s.213 (2) the court may:
(a) make [a further order for disclosure];
(b) draw an inference that is adverse to the person, including attributing income to that person in an amount that the court considers appropriate, and make an order based on the inference;
(c) require a party to give security in any form that the court directs;
(d) make an order requiring the person described in subsection (1) to pay
(i) a party for all or part of the expenses reasonably and necessarily incurred as a result of the non-disclosure of information or the incomplete, false or misleading disclosure, including fees and expenses related to family dispute resolution,
(ii) an amount not exceeding $5,000 to or for the benefit of a party, or a spouse or child whose interests were affected by the non-disclosure of information or the incomplete, false or misleading disclosure, or
(iii) a fine not exceeding $5,000;
(e) make any other order the court considers appropriate.
Obtaining BC Family Law Disclosure and Determining Whether Financial Disclosure is Adequate
Whether financial disclosure is adequate depends on the circumstances. For an employee who has no sources of investment income, it is usually just a matter of determining an accurate projection of income based on their most recent pay stub and income tax information for the past three years. For an independent contractor or business owner, adequate disclosure becomes more complex because of their ability to withhold information. In these circumstances, it is important to obtain as much information as possible, which is something our top rated Vancouver Imputed Income Support Lawyers can get involved in. In these situations, our Vancouver imputed income support lawyers ensure reported income is based on full and true disclosure. Cash income analysis, life style audits, evidence from disgruntled former employees, tracing bank account transfers and withdrawals and forensic audits are just a few techniques we can use.
BC Family Law Income Determination
Martinson J. of the Supreme Court of BC has developed an eight-step approach to income determination and on obtaining BC family law disclosure. This is set out inter alia in Murphy v. Murphy,  B.C.J. No. 1253 (S.C.) at para. 11:
Step One – Gathering Financial Information
In order to make sure that children have the benefit of the income earning ability of their parents, the judge has to have full financial disclosure. Therefore the Guidelines set out what financial information is required and also set out the legal consequences if the financial information is not provided.
Step Two – Predicting Annual Income based on Current Income
Income is determined using the sources of income that make up “total income” on an income tax return. The Guidelines say that the judge must examine each source of income separately.
The judge will therefore find out what the parent is earning from each source of income at the time of the court hearing, using the most current information available. The judge will then take that information and use it to predict what the parent will earn through the year. The Guidelines require the judge to adjust that income to reflect what income is actually available for child support.
Step Three – Looking at Historic Patterns of Income
Once the judge has predicted the income the parent will earn from each source of income, the judge will look at patterns of income over the past three years with respect to each source to see if the predicted annual income is the fairest determination of annual income from each source used. If not, the historic patterns can be used to predict income.
Step Four – Totalling the Sources of Income
Once the income from each source has been predicted, the judge will total the income from each source to determine the total income actually earned by the parent.
PART II – IMPUTING INCOME
The judge will follow a further four steps to decide whether income should be added on to what the parent is actually earning. The judge does not have to add on (impute) income. Rather, the judge has to decide in each case whether or not it is appropriate
to do so.
Step Five – Assessing the parent’s earning capacity
The judge will look at whether a parent is under-employed or unemployed; whether a parent unreasonably deducts expenses from income; whether a parent is not using property reasonably to generate income; and if the parent is a director or shareholder of a company, whether the income the parent receives fairly reflects all the money available to the parent for payment of child support.
Step Six – Deciding if Parents Have Tax or Trust Benefits
The judge will look at whether parents are entitled to certain tax or trust benefits. If they are, their children may be entitled to the advantage of those benefits.
Step Seven – Deciding if a Parent is Avoiding Paying Child Support
The judge will look at whether a parent is trying to avoid paying child support, such as when income has been diverted or financial information is not disclosed.
Step Eight – Deciding if Income Should be Added for Other Reasons
The judge will decide whether to add on income, even if the circumstances described in steps five, six or seven do not apply.
Hire A Winning Team To Help You In Obtaining BC Family Law Disclosure
The difficulty in a Obtaining BC Family Law Disclosure case and the principles to be applied arises in their application but our skilled and experienced family lawyers can help you find your way to a just settlement or trial result. Contact your Vancouver Family Law Lawyers of Maclean Law for assistance.