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The importance of disclosure in family law settlements

The importance of disclosure in family law settlements

In a Blog post a few months ago, I talked about the need for full disclosure and accuracy in family law cases.

In situations of divorce, that disclosure involves the preparation of a sworn Financial Statement by each spouse. In Ontario, these are comprised of a specified court form  under the Courts of Justice Act which requires the party filling it out to list all assets, debts, income and expenses. The form is long, cumbersome and – unfortunately – mandatory under the provisions of the Ontario Family Law Rules. A family law matter may be filed with the court, without it.

However, even in cases where the spouses do not intend to proceed to court (i.e. they hope to resolve their differences by way of mediation or arbitration), it may be prudent for each of them to complete a Financial Statement, nonetheless.

Perhaps ironically, the full disclosure of assets, debts and liabilities by both parties will serve to protect each of them. For example, under the Family Law Act a court can set aside a negotiated separation agreement in cases where there has not been full disclosure by a spouse ; a sworn Financial Statement from both parties therefore amounts to a relatively easy way to ensure that there has been full disclosure. Also, the exchange of Financial Statements will allow the parties’ respective lawyers to provide accurate legal advice on matters such as the range of child or spousal support that may be owed from one spouse to another.

In a case called Ward v. Ward, the Ontario Court of Appeal clarified that while the exchange of sworn Financial Statements is not strictly necessary in cases where the parties agree to participate in the collaborate law process (which does not involve going to court) the full disclosure and knowledge of the financial circumstances is a vital part of … and is mandated by …. the Family Law Act.   The Court of Appeal described:

“…neither party filed a financial statement, nor was one required under the terms of the process to which they agreed. While this did not diminish the obligation to disclose, in this case, the parties relied on the collaborative law process and other avenues of disclosure, including net family property statements and information from Mr. Wetstein [the family friend and accountant]”

The Court ultimately held that, even without the parties having sworn Financial Statements, they each had sufficient knowledge of their respective financial situations; accordingly there was no reason to set aside the agreement that they had negotiated.

Links to the required forms and finacial statements can be found on our main website www.russellalexander.com

For the court’s decision in Ward. v. Ward reference http://bit.ly/pxoluo

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit www.RussellAlexander.com