In October 2018, I wrote a blog about financial disclosure, in which I discussed the importance of exchanging financial disclosure when negotiating a Separation Agreement in Family Law cases. The focus of that blog was drawing our readers’ attention to the risks of entering an Agreement without first exchanging financial disclosure. Not only is financial disclosure important in negotiating Agreements, but it is mandatory in Family Court cases involving financial issues, and failure to produce your financial information can have serious consequences.
Sparr v. Downing Decision
On December 11, 2020, the Court of Appeal for Ontario released a decision, Sparr v. Downing, which highlights the importance of making all required financial disclosure in a Family Court case. The only outstanding issue in this case is child support, and in their very brief decision, the Court of Appeal upheld the Motions judge’s decision to strike the Appellant’s pleadings for failure to provide financial disclosure. As a result of the Court’s decision, Mr. Sparr will lose the opportunity to participate in the case going forward.
In a Family Court case, the court takes the obligation of each party to provide disclosure with respect to their income and other financial circumstances very seriously. Failure to provide financial disclosure required by the Family Law Rules and as ordered by the Court makes it difficult to resolve disputes, and can result in an increase in the time and cost involved in resolving a dispute.
What needs to be disclosed and when?
The Family Law Rules set out the financial disclosure that is required of every litigant in a Family Law case, when the disclosure must be made and require that each party file with the Court a Certificate of Financial Disclosure to let the court know what disclosure has been provided. In addition to the minimum disclosure required under the Family Law Rules, a Family Court judge may also make an Order requiring additional disclosure to be provided and set out deadlines for that disclosure to be produced.
It is not unusual for a Family Court judge to Order production of disclosure over and above that required by the Family Law Rules, including bank statements, credit card statements, loan applications and various other documents.
It can be an onerous task for a party to locate and assemble all of the disclosure requested of them; however, it is essential that every effort is made to come into full compliance with disclosure requirements, as failure to do so can have serious consequences. In the Starr case, the outcome of the Court of Appeal decision is that Mr. Starr’s child support obligation will be determined without Mr. Sparr’s participation and without full knowledge of his financial circumstances, which could result in a higher child support obligation than would otherwise be ordered.
While striking pleadings is the most extreme remedy for failure to disclose, the Court of Appeal in Sparr has indicated that it is an appropriate remedy where someone has repeatedly failed to produce for the other party and the court, the information that is required of them. In other cases, even where a court may not go so far as striking a party’s pleadings, there are other remedies available, which include ordering an amount of costs payable to the other party.
If you would like to schedule a consultation with one of our Family Lawyers, please contact our office at (905) 372-1994.