Court Imposes Financial Penalty For Failure To Disclose

Written on behalf of Arbesman Hamilton LLP

Going through a separation or divorce is not only emotionally stressful, but it also brings with it a list of things to address before a divorce is made final. In most cases, financial disclosure is required to settle a number of issues, such as division of property, spousal support, and child support. As with any request made by the court, it is incredibly important to follow their direction. As is seen in a recent decision from the Family Court division of the Ontario Superior Court of Justice, failing to do so can result in a costly penalty.

A request for disclosure

The husband and wife began over four years ago. In November 2015 the wife had asked the court to order the husband to provide financial disclosure. An order was granted, as were four subsequent orders over the nearly four years between the original request and the date of the hearing. At the current hearing, the wife produced a chart showing what the husband had still failed to disclose. In preparing for the hearing the husband failed to respond to the wife’s affidavit asserting he had neglected to meet his disclosure obligations.

A frustrated court

The court went through a list of items that the husband had still failed to disclose, noting that there was a considerable amount. The court also pointed out that between November 2018 and the date of the hearing, he had made some efforts to meet his obligations under the orders. The court decided to give him one last chance, listing in detail what he was to present.

Should the husband
face a delay penalty?

The wife argued that the husband should be required to pay a delay penalty. The court acknowledged that it does have the authority under the Family Law Rules to impose such penalties. The court’s frustration with the husband was made clear in its decision, which stated,

“The court should not have to make orders requiring parties to disclose information.  The husband has the means to litigate.  His TD investment account increased by over $1,190,000 from March 2017 to March 2018.  He is quite savvy at investing and moving his money around.  He earned $722,154 in 2018.  A series of deposits in his bank account cannot be traced.  The wife does not know where the children’s RESP funds have gone.  She had to hire an accountant to make sense of the disclosure that has been produced.”

In this case, the court agreed with the wife in determining that a court order alone will not compel the husband to provide the documents. The court wrote, “Five other orders have already been made, he has paid the associated costs and yet he has not complied with them.  All of this shows that he believes he can disregard court orders.” The court went on to rules that if the husband fined not comply with the court order by September 2, 2019, he would be fined $500 for each day of non-compliance.

At Arbesman Hamilton LLP our experienced family law lawyers can guide you through the process of separation and divorce, providing strong guidance on any number of issues planned for or otherwise. Contact us online or at 416-481-5604 to book a consultation and discuss your options with whatever family law issues you may be experiencing.