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Beware Non-Disclosers…

The importance of early, transparent and complete disclosure cannot be emphasized enough in family litigation. A recent decision penned by Justice Myers of the Superior Court of Justice and another by Justice Brown of the Court of Appeal reminds family law litigants that the failure to make full and frank financial disclosure in a timely fashion is not going to be tolerated by the courts.

In Manchanda v. Thethi, Justice Myers begins by asking, “When is enough, enough? It has been clear for over 15 years that financial disclosure – early, voluntary, and complete financial disclosure – provides the factual foundation for the resolution of financial issues in family law proceedings.” His Honour reviews several decisions that speak to the importance of voluntary and timely disclosure in family law proceedings in coming to the conclusion that the refusal to abide by the Family Law Rules and court orders for disclosure requires a finding of “game misconduct” and ejection from the proceeding (ie. struck pleadings). This decision should be viewed as a caution to all family law litigants and counsel with respect to disclosure – do not wait for the order – be forthright from the get-go or expect harsh repercussions. Here is a link to the decision: http://www.canlii.org/en/on/onsc/doc/2016/2016onsc3776/2016onsc3776.html?autocompleteStr=manchanda%20th&autocompletePos=1

In Gray v. Rizzi (released by Manchanda), Mr. Rizzi refused to provide disclosure and ultimately, the court imputed income to him to determine both retroactive and prospective support in a Final Order. Several years later, Mr. Rizzi came waving his very late disclosure at a motion to change his support obligations – both retroactively and prospectively. After the trial, Justice Olah accepted Mr. Rizzi’s tardy disclosure and recalculated retroactive and prospective support owed – including for a period prior to the Final Court Order. In fact, the effect of Justice Olah’s decision was the imposition of a significant repayment obligation upon Ms Gray. She appealed and was represented by Cheryl Goldhart & Maneesha Mehra at the Court of Appeal.

In a decision written by Justice Brown, the Court of Appeal takes the opportunity to impress upon family law litigants that late disclosure will be admonished in the same fashion as non-disclosure because the net result is the same – unnecessarily added costs, wasted court resources and needlessly elongated litigation. In fact, Justice Brown entitles that section of the Endorsement, “Non-Disclosure should not be Rewarded”. In ultimately coming to the conclusion that Mr. Rizzi is not entitled to a variation of his support obligations prior to 2014, the court reminds us that an application to vary is not an appeal and must be rooted in a material change of circumstances – which is not the same as suddenly choosing to provide disclosure that was readily available but withheld at the time of the original order. The message is clear – choosing not to disclose does not entitle the non-discloser to get a second kick at the can by way of a variation application because he or she found the result to be undesirable. Rather, disclosure is mandatory in the first round.

Here is a link to the decision: http://www.canlii.org/en/on/onca/doc/2016/2016onca152/2016onca152.html?autocompleteStr=gray%20rizzi&autocompletePos=1

About the Author

Maneesha Mehra is an associate at Goldhart & Associates and joined the firm in February 2015 after practicing at several boutique family law firms in Toronto. She was called to the bar in 2006 after articling with a full-service law firm. Maneesha has experience in civil litigation, but has been practising family law exclusively since January 2008.

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