Disclose! Disclose! Disclose!

The Importance of Disclosure in a Family Law Proceeding

“Never lie to your family lawyer.”

You should never lie to your lawyer. Your lawyer must have all of the information about you and your case to ensure they represent you to the best of their abilities. Anything you tell your lawyer remains confidential, with rare exceptions. Rare meaning someone is about to do something really, really stupid.

The same rule applies to disclosure. Always disclose all of the important financial information regarding your family law case. Rule 13 of the Ontario Family Law Rules is dedicated to the rules and requirements for financial disclosure in a family law proceeding.

The Ontario Court of Appeal in Roberts v. Roberts, 2015 ONCA 450 reminds us that serious consequences can arise if you are not forthcoming with all of your important information. In Roberts, the appellant husband’s pleadings were struck by the motions judge for failure to comply with orders requiring him to disclose financial information. The Ontario Court of Appeal upheld this decision.

Family law case on disclosure

The parties were married in 2001 and separated in 2012. Together they owned and operated five nursing homes. They had no children from their marriage.

The respondent wife commenced an application for divorce and an equalization payment in January 2013. She alleged in part that her former husband was using his companies to hide funds. The husband filed an Answer claiming a deduction for property owned at the date of marriage, an equitable interest in property owned by the respondent and spousal support for him. Based on the claims made by both parties, extensive documentary disclosure would be required.

A few weeks after the exchange of pleadings, the wife moved for disclosure. The motion judge ordered that the parties exchange requests for disclosure within 20 days and the documentation be produced within 60 days thereafter. This order was made on consent by both parties.

The Husband did not comply with the Order. The wife brought another motion which was granted on consent and each respective deadline was extended. The wife served a request for disclosure as required, but many of the documents were not produced by the husband. The wife then moved to strike the husband’s pleadings. The motion judge granted a further extension to produce the disclosure rather than strike the pleadings. The order also provided that failure to answer all of the requests for disclosure by the deadline would entitle the wife to renew her motion to strike the husband’s pleadings.

The appellant did not answer all of the requests for disclosure. The wife renewed her motion to strike the pleadings and it was granted on September 24, 2014.

The Court’s Analysis on Family Law Disclosure

The Ontario Court of Appeal reiterated that the most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing. Failure to abide by this fundamental principle impedes the progress in the court case; it causes unnecessary delay and acts to the disadvantage of the other party. It also affects the administration of justice where unnecessary judicial time is spent on issues that should be easily resolved by the parties. Ultimately, the adjudication of the proceeding is stalled.

The Court of Appeal stated at paragraph 13 that “Financial disclosure is automatic. It should not require court orders – let alone three – to obtain production”. They stated that the power to strike pleadings should be used sparingly and only in exceptional cases. This case was considered an exceptional case. The Court of Appeal held that if the conduct of the party includes ignoring court orders and failing to follow the basic principles of family law litigation, it puts them in the “exceptional” category.

Ultimately the appeal was dismissed with costs fixed at $10,000.

Take away point – Disclose or face an angry judge!

The court does not look favourably on the parties when they do not provide full and frank financial disclosure. Each party has a positive obligation to provide all relevant financial information to the other side. As seen from this case, there can be significant and expensive repercussions if this fundamental rule is not followed.

However, it is important to be reasonable in the type and amount of disclosure requested. One party cannot go on a “fishing expedition” to find information that is irrelevant or unearth every single document that in any way might be connected to the proceeding.  All financial documents that pertain to determining the parties’ net family property or income can be requested and must be produced.