The importance of Financial Disclosure in Family Law
The failure to promptly provide all financial disclosure in family cases has been described by our Court of Appeal to be a cancer in family litigation.
The failure to provide proper disclosure requires time and money to press for disclosure orders which increases legal costs in family litigation. The 2013 Family Law Act (FLA) added penalties under section 213 for failure to comply with the disclosure obligations under the FLA, the Child Support Guidelines and court rules. Spouses must file a sworn financial statement with all supporting documents such as tax returns and CRA notices of assessment for the prior 3 years. Parents under the Guidelines have an annual obligation to exchange current disclosure so child support can be re-calculated every year.
If a litigant fails to provide proper disclosure then they can be fined per s213 FLA in addition to court costs. For example, in Allen v. Allen, 2021 BCSC 970, the slow to disclose spouse was fined $2,500 for being too slow to disclose even though disclosure was finally provided. In addition, this slow litigant was also ordered to pay $2,500 forthwith in court costs for the disclosure Application which should not have been required given the clear court rules, laws, case law and consequences.
The moral of the story is to comply with all court rules and laws promptly or risk paying avoidable penalties and court costs. Settlement is also more likely with full disclosure.