I recently came across an interesting post by Pei-Shing B. Wang, titled: “Hiding a Gold Mine? You’ll Probably Get the Shaft — Financial Disclosure in Matrimonial Proceedings“. The basic premise of the post was to explain why it is so important for divorcing parties to make a “full financial disclosure”, and cites a recent Ontario court decision where a husband decided to conceal lottery winnings. A decision that clearly backfired! (Also of note: We will be publishing one of our first lawyer interviews with Pei-Shing tomorrow.)
Here are some key quotes:
Financial disclosure is vital in family law proceedings because (1) the law mandates it and (2) without it, the parties cannot make informed decisions on how to settle their affairs. In Ontario, if either party fails to make adequate financial disclosure, it may invalidate whatever agreements flow from the financial statements.
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In the extreme case of Helmy v. Helmy, the husband won a lottery prize of $2.5 million shortly before his separation from his wife of 20 years.* (Some speculated that it was the reason for separation.) In an attempt to keep his lottery winnings from the reach of his then separated wife, the husband conjured an elaborate web of lies involving his family members, both in Egypt and in Canada.
After finding that the husband and his family members had given false evidence, the judge ruled that the husband (1) bought a house and other properties in his sister’s name for the sole purpose of concealing the facts about the lottery from the wife, (2) signed a false affidavit stating that his brother was the winner of the lottery, and (3) deliberated lied under oath to deceive his wife and the court for the purpose of hiding the lottery winnings from her.
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The court was appalled by the husband’s conduct of giving a significant amount of money away just weeks before the separation for the purpose of concealing the wife’s entitlement from her. For all her sufferings, the wife was awarded damages for civil conspiracy made against her. What is more, because the defendants had deliberately and maliciously conspired to deprive the wife of her rightful share of the husband’s net family property, the wife was entitled to punitive damages against all the defendants in the amount of $50,000.
