Enforcing Family Law Financial Disclosure has become a priority for family courts across Canada. Our Enforcing Family Law Financial Disclosure lawyers have been a the forefront in stamping out failures to disclose in family law cases and we hold several precedents and records for enforcing family law financial disclosure.
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Our firm recently set a record for fines for non disclosure and non compliance with court orders. Past wins for enforcing disclosure and breaches of support payments included cases where record special costs of $1.5 million were ordered and where a lying spouse who failed to pay support received a 6 month jail sentence and was ordered to pay costs in the hundreds of thousands to our client.
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“Non-disclosure of assets is the cancer of matrimonial property litigation.” (Cunha, BCSC 1994)
Powerful statement from the Court (especially in 1994!) regarding financial disclosure. But has this statement held up since then? You bet it has! Especially when it comes to the Courts awarding costs for failure to provide financial disclosure.
In a previous article Calgary Alberta Family Lawyers Financial Disclosure , we discussed the importance of financial disclosure in family law matters generally, including the Supreme Court of Canada’s statement that each party has a “duty to make full and honest disclosure of all relevant financial information”, and that the failure to do so may affect the validity and enforceability of any Separation Agreement reached between the parties (Rick v. Brandsema [2009] 1 SCR 295).
In a further article Family Company Financial Disclosure Lawyers, we discussed the increased financial disclosure obligation (for child support purposes) if you earn income through self-employment or a closely held corporation, including the obligation to provide a reasonable explanation for all expense deductions from income (Sweezey v. Sweezey, 2016 ABQB 131; Cunningham v. Seveny, 2017 ABCA 4; Zdyb v. Zdyb, 2017 ABQB 44).
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But what if you don’t provide this financial disclosure when requested (or worse, Court-ordered) to do so? How have the Courts dealt with the situation of the failure to provide financial disclosure. Three (3) cases from Ontario and Alberta indicate the possible consequences.
Jail and Fines
In Ontario, at a 2020 contempt hearing (see: Horrocks v. McConville, 2022 ONSC 6885), where a husband (allegedly!) burnt in excess of $1M cash in two bonfires ‘out of frustration with divorce proceedings’ (and therefore could not produce financial disclosure for such money), was jailed for 30 days for violating a Court Order not to divest property and fined $2,000 a day until he provided financial disclosure (particularly as to where the $1M cash went). The ex-wife was awarded $6,000 in costs and also granted a protective Restraining Order.
Significant Court Costs
In another Ontario case (see: Knight v. Knight, 2019 ONCA 538), the Ontario Court of Appeal upheld the Trial Judge’s decision to order $490,000 costs against an ex-husband, approx. $168,000 of which related to the costs of chasing financial disclosure.
In Alberta, in 2021 (see: Foley v. Leavitt, ABQB 2021 875), on a child support application, the Court imposed solicitor/client costs (usually reserved for only the most extreme situations involving “reprehensible, scandalous, or outrageous conduct”) against a father who (while partially successful on the application) had to be forced to comply with a Court Order to meet his financial disclosure obligations. Justice R.E. Nixon stated (at para.’s 5 -7):
“The usual outcome is that the successful party will receive costs as per Rule 10.29 (1)… In terms of the positions at the family special, and the issues, I do not find that solicitor-client costs are deserved beyond the period of non-disclosure by Mr. Leavitt, which is egregious conduct by him and made this application much more expensive. In terms of the issues argued, … (t)here was thus divided success. I have to consider that, as well as the fact that there was confusion arising from some of Mr. Foley’s financial disclosure which hampered both and the court resolution.”
Current State Of Enforcing Family Law Financial Disclosure
So, has the above statement in Cunha held up? Perhaps we should look at the whole statement made by British Columbia Supreme Court Justice Fraser (see: Cunha v. Cunha, 1994 CarswellBC 509, at para. 9):
“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.”
Wow! Somewhat prophetic, especially given the recent comments of the Supreme Court of Canada regarding financial disclosure in cases such as Michel and Colucci (2021 SCC 24, at para. 48)
“Simply stated, disclosure is the linchpin on which fair child support depends and the relevant legal tests must encourage the timely provision of necessary information.”
So, as we have repeatedly stated, full financial disclosure is one of the major principles (‘pillars’) of family law in Canada – it allows for: honesty and transparency regarding finances; saves both parties time, money and stress of litigation, and; provides a sense that justice was done.
No wonder Courts are becoming increasingly aggressive towards parties taking a ‘cavalier’ approach to financial disclosure.
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