Spousal Support Advisory Guidelines and Disclosure Obligations
Whenever spouses separate, the often-long process of untangling their financial affairs begins. Questions frequently arise as to the nature and scope of the financial disclosure that needs to be made as part of that process. Although I have written previously about the scope and extent of this disclosure in Ontario, it’s important to put it into the context of how it relates to a court’s calculation of any spousal support obligations between the parties.
Child Support Enactment
Historically, the various Ontario courts’ approaches to calculating the spousal support that was owed from one party to the other had been a bit erratic, in that there was no uniform methodology of formula to be applied. But several years ago, both the federal and provincial governments enacted Child Support.
Using Advisory Guidelines To Calculate Support
Guidelines, which established a formulaic approach to the calculation of child support, based on several factors including the paying parent’s income level. After it was introduced, courts began using the income determined for the purposes of calculating child support as the baseline income for spousal support awards as well. This was followed by the introduction of the Spousal Support Advisory Guidelines which – although not compulsory in nature – added some structure to the process, and added a focus on the income of the respective parties as a starting-point for the calculation of the precise amount of support that should flow from one to the other.
Ontario Family Law Rules
Given that this income-based calculation remains the current state of the law in Ontario, the question of how each spouse’s respective bottom-line “income” is calculated remains a key factor in determining spousal support obligations. It should be noted that the approach, guidelines and calculations used for the purposes of reporting income to the Canada Revenue Agency for income tax purposes is not that same as those used for determining support in Family Law. While each spouse may provide providing his or her tax return, but this is just a starting-point for what must be disclosed.
Enter the Ontario Family Law Rules. These Rules impose a general framework for the exchange of financial information between separating spouses, requires each spouse to provide the other with (among other things) a Financial Statement in a regulated form, and mandates that there be full and frank disclosure by each party of their respective information.
The Family Law Rules also encourage early disclosure, and mandate that all documents that are within a party’s control – or which are available to a party at his or her request – are to be listed and produced. A court may also order that an outside party to the litigation be questioned.
There are sanctions for non-disclosure as well: A breach of a court order for disclosure may result in the court imposing various penalties against the offending party, including certain costs sanctions or having his or her pleadings struck. (However, if a party fails to comply with a disclosure order he or she is given an opportunity to show that they exercised due diligence in trying to comply with the order).
Preparation of Financial Disclosure Statement
I have written more fully in previous blogs about the kind of information that goes into the preparation of each party’s Financial Statement, and the types of information and documents that must be provided. Is she be noted that the Family Law Rules define the term “documents” to include “information, sound or images recorded by any method.” This means that electronic documents – including e-mail correspondence – are also potentially covered and are subject to the obligation imposed on each party to preserve information. Indeed, the court has certain penalties – all the way up a finding of contempt of court – that it may impose in situations where a party has intentionally destroyed evidence that pertain to a family law proceeding.
What Does The Court Look For in Disclosure?
The scope of disclosure is very broad; however, this does not mean that it is unlimited. In particular, courts are on the lookout for situations where one party is conducting a “fishing expedition” in connection with the information held by the other party, usually as part of a litigation strategy. Moreover, courts – by way of an overall mandate to deal with cases justly and proportionately to their importance and complexity – are also authorized to curb excessive disclosure on the parties’ part, since this can negatively affect the litigation by adding delay and increasing the costs of the proceedings.
How To: Calculate, Document and Present Income for Spousal Support
When taken together, the Spousal Support Advisory Guidelines provide a framework for calculating spousal support using each spouse’s income as a starting point, while the Family Law Rules provide a framework for putting forth the documentation used to calculate that income. It is accordingly important for separating spouses to understand how these Guidelines and Rules work, and to get competent legal advice on what their obligations may be.
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 us at www.RussellAlexander.com