We often write about new and developing case law in the area of financial disclosure. This is often a topic that we discuss amongst the office as well. This is because disclosure is not only so critical for support and matrimonial property, but because parties are often resistant, or even downright obstructive, when it comes to disclosing. As Justice Fraser stated in Cunha v. Cunha, 2018 BCSC 332:
“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 unnecessary battle may lead weary and drained women 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.”
However, Justice Fraser is not the only one to express disapproval towards failure to disclose financial information.
In Ripulone v. Smith, 2018 ABCA 167 The Court of Appeal in Alberta has again confirmed their dim view of parties who refuse to properly disclose their income and assets when requested. In this case the Court addressed a matter in which a payor of child support unilaterally reduced their monthly payment, and then brought a formal application to the Court to reduce their child support. Despite repeated requests from the opposing party, including a filed Notice to Disclose, the payor refused to provide full and complete disclosure of their financial information. After continued requests, the payor finally told the opposing party to contact his accountant. The accountant also failed to respond.
The Court confirmed its previous comments that disclosure obligations are just that: legal obligations of the parties. The Court also reiterated that when dealing with the reasonableness of corporate or business expenses, it is the party claiming the expenses that is obligated to provide a reasonable and understanding explanation or disclosure related to those expenses – it is not acceptable for a party to provide disorganized bulk disclosure without explanation, or to tell an opposing party to “talk to my accountant”. It is the party whose income is relevant who bears the burden of organizing and properly disclosing the information to the other party in a format that would allow meaningful review by the other party and the Court. Providing disorganized bags of receipts or documents is insufficient.
The courts are constantly clogged with disclosure applications where parties have failed to properly meet their obligations in respect of financial disclosure. This increases legal fees and has historically been used by the party controlling the finances to delay and frustrate the other party in the hopes they will exhaust their resources or give up. The courts in Alberta are sending a clear message to these litigants- disclose, disclose swiftly, disclose in a manner that can be understood or we will impute an income to you.