Disclosure and Non-Disclosure: A Vital Factor in Family Law

Written by: HHLaw (View All Posts ) Published: February 6, 2017
Categorized: British Columbia, Family Law, Finances, Procedure.

Duty to disclose and steps to taken when a spouse refuses to provide financial information

Full financial disclosure is an essential element to the resolution of any family claim involving support orders or the division of property.  “Non-disclosure or delayed disclosure of financial information is a costly impediment to the timely and just disposition of family disputes.”[i]  In Cunha v. Cunha, 1994 (BCSC), Mr. Justice Fraser described non-disclosure 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 an unnecessary battle may lead weary and drained [parties] 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.” [ii]

The obligation to provide full financial disclosure comes from the Family Law Act, SBC 2011, c 25 (the “FLA”), the Supreme Court Family Rules, BC Reg 169/2009 (the “SCFR”); and the Federal Child Support Guidelines, SOR/97-175.[iii]

Section 5 (1) of the FLA states “a party to a family law dispute must provide to the other party full and true information for the purposes of resolving a family law dispute”.[iv]  SCFR 5-1 requires the disclosure of financial information in contested family law cases involving:

1. claims for child support or applications for spousal support under the Divorce Act, RSC 1985, c 3 (2nd Supp), or the FLA;
2. review or variation of a support order;
3. applications for the division of assets under part 5 the FLA;[v] or
4. an order under the Family Homes on Reserves and Matrimonial Interests or Rights Act, SC 2013, c 20.[vi]

If your spouse is party to a Supreme Court family claim involving any of the above-mentioned claims or applications, he or she is required to complete the relevant sections of a Form F8 financial statement[vii] along with any additional information required under SCFR 5-1,[viii] including business or corporate interests.

Insufficient Information

If the information provided to you in the Form F8 is insufficient, SCFR 5-1(13) states that you may demand particulars from your spouse.[ix]  If the particulars are not provided within 7 days after receipt of your demand, the court may order that particulars be served within a specified time, or order that a new Form F8 financial statement be served within a specified time.[x] You may also request disclosure of business or corporate interests in the disclosing party’s possession or control, if applicable.[xi]  If the party receiving the order does not comply, the court may enforce the order.[xii]

Disclosure Enforcement Mechanisms

Under the FLA, the court may at any stage of a proceeding make an order to disclose information in accordance with the SCFR’s or the Provincial Court (Family) Rules.[xiii]  Under SCFR 5-1, if a party fails to comply with a requirement under SCFR 5-1 to file or serve a Form F8 financial statement or any applicable income document or fails to comply with an order under SCFR 5-1 to provide particulars, the court may do any or all of the following:

1. order that the Form F8 financial statement and applicable document or particulars be filed or served or both on terms the court considers appropriate;
2. dismiss all or part of that party’s claim or application;
3. strike out all or part of that party’s response to family claim or response to counterclaim;
4. punish the party for contempt of court, exercised by an order of committal or by imposition of a fine or both;
5. impose a fine not exceeding $5 000;
6. draw an adverse inference against the party;
7. attribute income to that party in an amount the court considers appropriate; or
8. make an order as to costs.[xiv]

Under the FLA, if a party fails to comply with a requirement of disclosure made under section 212 (“orders respecting disclosure”), or a requirement to disclose information in accordance with the SCFR’s or the Provincial Court (Family) Rules, within the time or in the manner required by the order or SCFR’s, or provides information that is incomplete, false or misleading, under section 213 of the FLA the court may:[xv]

1. order a party to pay, to the other party or to another person, all or part of the expenses reasonably and necessarily incurred in complying with the order;[xvi]
2. 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;
3. require a party to give security in any form that the court directs;
4. make an order requiring the person described in subsection (1) to pay:
   1. 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,
   2. 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
   3. a fine not exceeding $5 000;
5. make any other order the court considers appropriate.[xvii]

Section 213 of the FLA makes it clear that the remedy for non-disclosure is available under a wide range of circumstances including situations where a party has provided incomplete, false or misleading information.[xviii]  According to the Honourable Mr. Justice R. Punnett,

“section 213 is to be used to secure proper disclosure in a timely and cost efficient way.  It therefore requires a robust application to accomplish that end.” [xix]

Financial disclosure is vital to the resolution of any family claim.  If your spouse is unwilling to comply with the rules of disclosure, the lawyers at Henderson Heinrichs LLP are available to ensure full financial disclosure is provided or that the enforcement mechanisms are properly imposed.

Endnotes

[i] J.D.G. v. J.J.V., 2013 BCSC 1274 (CanLII), <http://canlii.ca/t/fzqb3>, retrieved on 2017-02-03, at para.1 Per Honourable Mr. Justice R. Punnett,

[ii] Cunha v. Cunha, 1994 CanLII 3195 (BC SC), <http://canlii.ca/t/1dn7f>, retrieved on 2017-02-03

[iii] Family Law Sourcebook for British Columbia, 2015, I. Introduction to Financial Disclosure in Family Law [9.1]

[iv] Family Law Act, SBC 2011, c 25, Part 2 — Resolution of Family Law Disputes, <http://canlii.ca/t/52qn9> retrieved on 2017-01-31

[v] Ibid., Part 5 — Property Division

[vi] Family Homes on Reserves and Matrimonial Interests or Rights Act, SC 2013, c 20, <http://canlii.ca/t/52d9f> retrieved on 2017-01-31

[vii] Supreme Court Family Rules, BC Reg 169/2009, Rule 5-1 and 7-1 (8),(10) and (11)  < http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/169_2009_04#F8>

[viii] Ibid., Rule 5-1

[ix] Ibid.,, s 13

[x] Ibid., s 14

[xi] Ibid., s.19

[xii] Ibid., s.28

[xiii] Supra, note iv, section 212 (1)

[xiv] Supra, note vii, rule 5-1 and 21-7

[xv] Supra, note iv, section 213(1) and (2) and; note iii, [9.2] citing (B. (T.J.) v. F. (B.A.), 2014 BCPC 290).

[xvi] Supra, note iv, section 212 (2)

[xvii] Supra, note iv, section (2)(a)-(e)

[xviii] Supra, note i, at para. 19.

[xix] Supra, note i, at para. 25.