FINANCIAL DISCLOSURE
Financial disclosure is often said to be one of the most important parts of a family law case, but what exactly does that mean? What financial information are you obligated to provide your ex and why? How is your income determined? Keeping reading for the answer to all these questions and more.
What is financial disclosure?
Section 5(1) of the Family Law Act lays out both parties' duty to provide "full and true information for the purposes of resolving a family law dispute," including full and true financial information.
Without full and frank financial disclosure, parties can't have any kind of productive discussions regarding their property or support issues or ask the court to make a fair determination about these issues. Most of the times, financial disclosure is exchanged through a form called a Financial Statement.
What is a Financial Statement?
This is a document which includes information about your income, expenses, assets, and liabilities, with supporting documentation attached.
In Provincial Court, this can be found in the Form 4 Financial Statement[1] and in Supreme Court, in the Form 8 Financial Statement.[2] In essence, the Financial Statement is a statement of your current income, expenses, a list of your assets and debts, and supporting documents which could include:
· proof of income from all sources;
· recent pay stubs;
· copies of your income tax returns (notice of assessment, recent tax returns, notices of reassessment) with all schedules and attachments;
· bank statements;
· credit card statements;
· mortgage documents;
· line of credit statements;
· money owed to you;
· business interests;
· BC property assessment notices;
· Copies of all bank, RRSP, and investment accounts
Once you've sworn or affirmed your Financial Statement, you have promised the court that you are telling the truth in this form. If it is later discovered that you have provided "information that is incomplete, false or misleading," in your Financial Statement, the Court can make an adverse inference against you pursuant to Section 213 of the Family Law Act.
When the court makes an adverse inference, they can attribute income to you "in an amount that the court considers appropriate, and make an order based on the inference," which is why it is essential that you are truthful in your Financial Statement.
How do I determine my income?
If you are employed and receive a T4 from your employer, in most cases you will just need to look at line 1500 of your T1 Income Tax Return to determine your income.
If you or your ex owns a business, determining income can become a little more complicated. This is because business owners are able to deduct business expenses from their gross profits, but not all of these deductions are considered proper deductions for child support and spousal support purposes. In order to determine income in these cases, you may need to request further disclosure of bank account statements, profit and loss statements, business ledgers, etc.
What happens if my ex won’t provide financial disclosure?
If your ex doesn’t agree to providing financial disclosure, this can make your family law matter more difficult and time consuming. There’s a couple of things you can do to try and get the required information:
1) First, you can try sending them a written request, through your lawyer if you have one, letting them know what documents you’re looking for and when you need them by.
2) If your ex still won’t provide the required information, you can bring a court application, in either Provincial Court or Supreme Court, asking for an order to be made that your ex be required to provide the needed financial disclosure.
3) If your ex still doesn’t comply with the court order, it might be time to consider seeking fines for non-compliance with a court order.
Pursuant to Section 213(2)(d) of the Family Law Act, a court can order that someone who fails to comply with orders for disclosure be required to “all or part of the expenses reasonably and necessarily incurred as a result of the non-disclosure of information or the incomplete, false or misleading disclosure, an amount not exceeding $5,000 to or for the benefit of a party, or a spouse or child whose interests were affected by the non-disclosure of information or the incomplete, false or misleading disclosure, or a fine not exceeding $5,000.”[3]
If you have any questions about financial disclosure in your family law matter, reach out to our experienced team to talk about whether our services could be the right path for you. Contact us at info@mpeaklaw.ca or 604-746-3374 and we can help you get the financial information you need.
[1] https://www2.gov.bc.ca/assets/gov/law-crime-and-justice/courthouse-services/court-files-records/court-forms/family/pfa713.pdf
[2] https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/165_2024_FormF8
[3] Family Law Act, SBC 2011, c.25, s.213(2)(d)
