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Husband who Failed to Disclose Ordered to Pay $490,000 to Ex-Wife

Disclosure in family law proceedings is unfortunately often insufficient or not provided at all. This problem is nearly as old as the Divorce Act itself but in recent years, courts have become increasingly aggressive about ensuring sufficient disclosure is exchanged by spouses. One startling case from the Ontario Court of Appeal underscores this trend. In Knight v. Knight, 2019 ONCA 538, the Ontario Court of Appeal refused to hear the husband's appeal of a whopping $490,000.00 costs award against him. 

The Court of Appeal noted that much of this amount was related to chasing disclosure:

The largest component of the costs award is a disbursement of $228,306 paid to the respondent's accounting expert. Of this, $60,000 was for the preparation of a report on the appellant's income. The rest of the fees related to chasing disclosure, which was a significant problem for the respondent, and for attendances of the accountant at the disclosure motion, mediation, and trial. The respondent delivered an offer to settle prior to each stage and demonstrated she was prepared to settle the case on a reasonable basis.

This should be a cautionary tale for anyone going through a divorce. Insufficient financial disclosure will not be tolerated.

In Alberta, our financial disclosure responsibilities are set out in rule 12.41 and form FL-17. Rule 12.41(7) states:

If the respondent fails to provide the documents requested within one month of being served with the notice to disclose, the Court may ... (c) order the respondent to pay costs to the applicant in an amount that fully compensates the applicant for all costs incurred in the proceeding.

This makes it clear that a high costs award such as in the Knight decision is also possible in Alberta where disclosure is not sufficient.

It is important to note that the rule creates a minimum standard for disclosure in family law proceedings. In addition to these rules we have questioning processes and the affidavit of records process.

Questioning allows one spouse to ask any relevant and material question to the other spouse, including requesting any relevant and material document. It may be done in writing (called written interrogatories) or in person with a court reporter present to record the questions and responses.

The affidavit of records process forces a spouse to create a document listing all relevant and material documents relating to the divorce and to provide those documents for inspection by the other spouse.

If you have questions about financial disclosure or if you have been served with a notice to disclose contact Tyler Fric.

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