Financial Disclosure In Family Law In Ontario: When is it Enough?

The law is very clear that financial disclosure is an integral part of the family law process in Ontario. The reason for this is very simple, there is no way to know if a resolution is fair if you don’t even know what must be divided.

In a recent decision in the Ontario Superior Court of Justice, the foundational principles of financial disclosure were reviewed and then applied to that specific case. There were some interesting findings that need to be shared.

Financial Disclosure Obligations

Prior to reviewing the decision, it is important to review the foundational principles for financial disclosure in family law. The Ontario Court of Appeal issued a decision in 2015, which has been referred to 219 times since in other decision. Effectively, the Court found that the “most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing”. In that case, the court continued by stating that failure to abide by this principle frustrates the process and wastes court resources.

However, it is important to note that financial disclosure obligations are not infinite. This a concern often raised when a Party is faced with excessive requests for financial disclosure. The Ontario Court of Appeal has also commented on this issue in finding that exhaustive financial disclosure “may not always be appropriate”. The Court found that there were three considerations for a determination on the appropriateness of the disclosure request.

First, the burden on the opposing party. Second, the relevance of the disclosure to the issues being resolved in the court action, and third, the cost to obtain the disclosure in comparison to the importance of that disclosure. In other words, there is an obligation on the party requesting the financial disclosure to ensure that the request is reasonable and necessary.

Application to this Case

After reviewing the legal framework for financial disclosure, the court then reviewed the specific financial disclosure sought in this situation. A few highlights of this request are as follows:

Request for Pay Stubs

There is no indication in the decision as to what the father did to earn his income. However, the mother asked the father to produce one full year of pay stubs. The father refused on the basis that the request was overly broad and offered to provide his three most recent pay stubs.

This is an issue that often comes up. For a typical T4 earner, where there is no dispute over the income, it always seems a little odd when a party requests substantial pay stubs. The last pay stub for the year combined with a T4 and Notice of Assessment ought to be sufficient to address the issue. However, in this case, the court determined that since the burden to comply with this request was insignificant and ordered the disclosure.

Monthly Statements for a Joint Bank Account

It always strikes me as odd when a party requests the other party disclose joint bank account statements. Rather than incurring legal expenses to argue over this, the party could just go the bank themselves and ask for the statements, since they are a joint account holder.

In this case, the mother asked the father to disclose the monthly statements for a line of credit she jointly held with the father. The court determined that since the mother could obtain these records herself, there was no order for the father to disclose.

Similarly, the mother sought disclosure of bank account statements for the father’s holding company. However, the mother had signing authority over these accounts and therefore was able to access this information herself without court intervention. In this case, the court found that since the mother could obtain this information, the court would not order the father to disclose.

Bank Statements When There is an Allegation of Domestic Violence

In this case, there were serious allegations of domestic violence, which included the father having a criminal history. The father requested the mother disclose her bank statements and the mother objected that this information would provide details to the father on her exact location, which would only perpetuate the violence.

A lot of information can be obtained from bank statements. These documents demonstrate where you shop, the day you shop, amounts of money you spend online, amounts of money you spend at grocery stores and how often you go to grocery stores. There is a very strong privacy interest in these statements, though while making a claim for spousal support, you still have an obligation to prove the need for that support.

Financial Disclosure Conclusion

In this case, the court found that because of the existence of domestic violence, the mother was to disclose her bank statements, but she was permitted to redact any information that related to the location of the stores she shopped at. The court made it clear that there was no need to redact the names of the store and did not permit any redaction beyond the location.

Financial disclosure remains a contentious issue in many cases and can be used as a tactic to unnecessarily escalate legal fees if there is a strong disparity between the parties respective incomes. If you have questions about financial disclosure in family law cases, contact Hearty Law to schedule a consultation.

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