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When one or both of the spouses involved in a separation or divorce own their own business or have complex income and assets, there are special considerations that may arise. The financial disclosure required in such situations may be more complex than in most situations. In knowing that, it’s important to remember that when the courts request information to be disclosed it’s in the parties’ best interests to abide by that request. The cost of failing to do so was learned the hard way by one of the parties in a recent decision from the Ontario Superior Court of Justice.
Case conference seeks financial disclosure
A case conference was originally held on September 14, 2020. Leading up to that conference, a number of items related to financial disclosure were requested. The documentation requested by the wife related to the husband’s role as a sole/controlling shareholder of a number of corporations. He was also the trustee and indirect beneficiary of a family trust. This request had been made on February 28, 2019. The husband, however, refused to provide disclosure beyond personal tax returns, some financial statements, and corporate tax returns.
Some details related to the value of the businesses owned by the husband trickled in throughout 2020, as did some documentation about the Trust. However, the material provided was not always legible, and was not as detailed as what had been requested.
Looking at the material provided by the husband
The court took some time discussing the type of business valuation provided by the husband. The type he chose fell short of meeting his disclosure obligations, and the court stated that it did not relieve him of his obligations.
The court looked at the behaviour of the husband in the time leading up to the hearing. He did not respond to the wife’s request for disclosure on February 28, 2019 until 17 months later. Even when he did respond, he did not provide what was needed, leaving the wife to spend over $20,000 trying to piece together details of the family trust and the businesses.
As a result of the husband’s failure to meet his disclosure requirements, he was ordered to pay the wife $20,000 to reimburse her for money she spent due to his “delayed and incompetent disclosure.” In addition, the court ordered the husband to pay the wife $10,000 for the delays his actions caused in the matter.
Contact the experienced family law lawyers Gelman & Associates to learn how our experienced family law lawyers can ensure the fair division of business assets during a separation or divorce. We provide our clients with the information and resources required to make informed decisions during a difficult period of transition. In addition to the extensive web-based resources available to our clients, all prospective clients are given a comprehensive family law kit during their initial consultation, with ample information and resources to help individuals understand and navigate the separation and divorce process.
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