McLeish Orlando Top Banner (post until Dec. 31/20)

Full disclosure essential for court to do its job

Separating couples who fail to fully disclose their financial assets to each other could end up paying a steeper price, says Toronto family lawyer Erin Chaiton-Murray.

“A central aspect of family law situations involving property issues is honesty, truthfulness and completeness,” says Chaiton-Murray, Senior Associate with Fogelman Law. “It’s extremely important that there be full and frank disclosure.”

She points to a recent case in Britain, where two women were able to have their property settlements re-opened after discovering that their ex-husbands hadn’t completely divulged all their financial information. As a result, a court awarded the women larger divorce settlements because their husbands hid their true wealth.

In handing down the ruling in one of the cases, the British judge said the husband’s fraud deprived the wife’s right to a full and fair hearing of her claims. There were suggestions that the decision could open the floodgates for previous divorce agreements to be revisited.

When undergoing separation in Ontario, both parties are required to present full disclosure by way of a sworn financial statement if there are financial issues raised, says Chaiton-Murray.

As in the U.K. situation, an Ontario court can potentially set aside a previous agreement if it was based on inaccurate information, she notes. If one party is later found to have provided a false or incomplete financial statement, their credibility could well be questioned in all future dealings or negotiations involving the case.

Under newly updated Family Law Rules, says Chaiton-Murray, there is a greater emphasis on disclosure being provided as early as possible in hopes of expediting the overall process. Through early disclosure, the material is ideally available by the time the parties attend their first appearance in court at the case conference.

That, says Chaiton-Murray, allows both parties to have some meaningful discussion right away about the substantive issues in the case, rather than just focus on what disclosure is still needed. The hope is that these types of discussions at a conference will lead to a negotiated settlement.

The lawyer’s job is to perform thorough due diligence by asking the relevant questions of their client in preparing the financial statement and supporting documents, says Chaiton-Murray.

"That includes ensuring that the content of the financial statement is complete and up to date," she says. "Any new or forgotten information needs to be updated and produced to the other side as it becomes available to ensure the financial information is current and complete."

In addition to requesting additional information or documents directly from the other spouse, the lawyer may also involve or rely on experts to produce valuation reports, critical analyses or other evidence or documents in order to ensure that they understand the full picture, says Chaiton-Murray.

A more detailed investigation coupled with multiple court appearances all focused on obtaining additional disclosure can get costly, however, so the client might, at a certain point, decide that the information they’ve gathered is enough to negotiate a settlement, she says.

But a fundamental aspect of a negotiated resolution in family law cases is ensuring that the parties involved understand all of the various factors, have the ability to analyze the information and can at least roughly calculate the range of their entitlement in order to negotiate a fair settlement, says Chaiton-Murray.

Where complete and accurate disclosure has been produced, it is a party’s prerogative to potentially agree to receive less money, for example, perhaps if it is traded-off for something else. But that type of balancing and consideration isn’t possible if the parties aren’t fully informed, she says.

“In complex financial cases it can be overwhelming. The time and money spent chasing additional disclosure and getting further answers has to be proportionate to the issues in the case,” she adds.


To Read More Erin Chaiton-Murray Posts Click Here
Lawyer Directory
BridgePoint Financial Services (post to 5.31.19)Toronto Lawyers Association (post to 6.30.19)MKD International (post until Sept. 30/19)Feldstein Family Law (post until May 31/19)Legal Print & Copy Inc.Conron Law Burrison Law (post until Sept. 30/19)Anton Katz (post until June 30/19)