How Much Disclosure Is Enough in Family Law Cases?

In family law cases, the level of disclosure can significantly impact the outcome. Understanding “How Much Disclosure in Family Law Cases Is Enough” is vital. This blog delves into the intricacies of disclosure, offering insights into what’s necessary for a robust legal strategy and ensuring fair resolutions in family law matters.

In cases involving any form of money issue, be it support, property division or any other claims regarding property, separated spouses or parents must be able to understand each other’s financial situation to do anything with the case. A party cannot even understand if a proposal or an agreement is good or bad if he or she does not know what the other party has. Child support of $1500.00 per month may sound like a great deal unless the support payer is actually making a million dollars per year. Both section 15.1(3) of the Divorce Act and section 33(11) of Ontario’s Family Law Act require that judges, and any child support calculation service, set child support to match the table amount for the support payer’s income. That is impossible without income disclosure from the support payer. It is not possible to equalize the value of separated spouses’ net family property without knowing the value of that property.

Since financial disclosure is crucial to having productive discussions about any financial issue in a case, the Family Law Rules require that it be provided at the start of any Family Court Case. Rules 13(3.2) and (3.3) of Ontario’s Family Law Rules require that within 30 days of serving his or her Application or Answer, each party must provide, to the other party the financial disclosure that is necessary to understand each party’s financial situation. The required documents are extensive, it include, among other documents, the following:

• Income tax returns, with all schedules and attachments, and Notices of Assessment (the document that comes back from the Canada Revenue Agency) for the three most recent years
• the party’s most recent pay stub
• A statement of performance-related pay (a statement of tips, profit-sharing plans, or other incentives)
• If the party has recently lost a job, a copy of the Record of Employment and any severance package
• For self-employed people – three years of their statements of the business financial statements or statements of business and professional activities, and the details of any payments may be to non-arms length individuals
• For people on Employment Insurance, Ontario Works, Ontario Disability Support Program or Workplace Safety and Insurance Board Benefits, Canada Pension Plan or a private pension plan, a statement showing the benefits paid and being paid
• The Municipal Property Assessment Corporation assessment for all real estate owned by the party
• Copies of all bank, RRSP, and investment accounts for the date of separation and, where available, the date of marriage
• A statement of the number and types of shares owned in any publically held corporation
• For beneficiaries under a trust, the trust financial statements and trust settlement agreement
• A mortgage statement for any real property for the date of separation and, where available, the date of marriage
• Statements for Lines of Credit for the date of separation and, where available, the date of marriage
• Statements for all Credit Cards for the date of separation and, where available, the date of marriage
• Any other private loan documentation

The above is not a complete list of the disclosures that may be required to understand a party’s financial situation. The disclosure that is necessary depends on the specific circumstances of the family. For example, when a party has valuable jewelry or artwork, he or she will also have to provide appraisals of those items. In addition, income determination is much more complicated for people who are self-employed. This is one of the reasons they are not permitted to use the Ontario Government’s Administrative Calculation and Recalculation of Child Support service. 

When, after reviewing the initial disclosure, a party does not understand the other party’s financial situation, there is a procedure under Rule 13 to get more financial disclosure:

1. The first step is to send a letter or email to the other party, or their lawyer, requesting the additional documentation or information that is necessary to understand the other party’s financial situation. The expectation is that anyone who receives such a request will answer it within seven days. 
2. If the answer is inadequate, the party requesting the additional disclosure may bring a motion in writing for a court order requiring the other party to produce the needed disclosure. The disclosing party can challenge the necessity or relevance of the disclosure by responding to that motion. The expectation is that if such motions are necessary, the parties will bring them before the case conference with the intent of having the motion decided and the disclosure provided before the case conference. Judges’ time is valuable and conferences in family court can get many parts of a case, if not the entire case, resolved if they are not bogged down with dealing with disclosure.

People in family court, especially self-employed people, often feel that their spouse is demanding excessive disclosure just as a tactic to wear them down and drive up their lawyer’s fees. That is a tactic that some lawyers use. However, it is also often the case that a lot of information is needed to understand a person’s financial situation especially where it is complex. Every Family Court Judge has seen many bitter parents or ex-spouses who have tried to hide large sums of money by organizing their finance statements in complex ways. While former spouses who trust each other may be able to avoid extensive disclosure, former spouses who are suspicious of each other often need extensive disclosure to be sure that the other party is not hiding money.

In most cases, it is faster and less expensive to just provide all the requested disclosure than it is to fight about it. Judges like that. In cases where the parties are suspicious of each other, and may be trying to run up each other’s fees, providing the extensive disclosure that a party is requesting often forces the requesting party to incur large lawyer or accounting fees reviewing that disclosure. That is because such a suspicious party will assume that there must be something hidden in all those pages of disclosure and so will have a professional comb through it carefully. It can be quite disheartening for a party to pay lots for professional fees only to find nothing. It can also be quite disheartening when a former spouse just hands over disclosure without a fight because then the requesting spouse feels that he or she is not “getting to them.” 

Understanding the nuances of financial disclosure is a critical component of family law in Ontario. Not letting a former spouse get under your skin is a smart strategy, but it’s equally important to handle financial disclosure meticulously. Navigating financial disclosure in family law cases in Ontario can either break or make your case, affecting not just the immediate settlements but potentially long-term obligations as well.