Why Financial Disclosure Matters (Even Years After Separation or Divorce)

Richard Cleveland
Family Law

In C.A.E. v. E.P.E., 2018 BCSC 2326, the respondent father and claimant mother brought cross-applications before the court. Among other things, the respondent sought to vary the terms of a consent order granted 6 years earlier, including termination of the $1,100 per month spousal support which he had been paying to the claimant since separation. While the claimant agreed to some of the changes sought by the respondent, she disagreed to spousal support being terminated and instead sought an increase to the respondent’s $1,100 obligation.

In support of his position, the respondent gave evidence as to the claimant’s lack of involvement with the children of the marriage and her alleged decision to ‘voluntarily’ leave the workforce. He also deposed that his spousal support payments over the years since separation had adequately discharged him of his obligations. However, the thrust of the respondent’s argument appears to have been the fact that the claimant had entered into a new relationship with a financially well-off individual, rendering her no longer in need of support from him.

The claimant also made a compelling case for material change. She gave evidence that since the separation, she had built up a small language school to provide her with regular income, had closed the language school in November 2018 to travel to Germany to care for an elderly relative, and planned to re-engage with the Canadian workforce upon returning to Canada.

In the original court order, the court considered the length of the marriage (20 years); the claimant’s choice to move to Canada to be with the respondent and the related loss of her nursing career in Germany; the claimant’s role as a stay-at-home mother during the marriage; and the respondent’s ability to pursue a meaningful and lucrative career as a result. It found that the claimant’s entitlement to spousal support was both compensatory and non-compensatory in nature.

In analyzing the current applications, the court noted that although re-partnering is a valid factor to consider in a variation application, where the rationale underlying the impugned support order is predominantly compensatory in nature, the fact of re-partnering will likely carry diminished weight (see Rozen v. Rozen, 2016 BCCA 303). Because of the compensatory nature of the original support order, the economic disadvantages suffered by the claimant were considered not yet to have been fully compensated.

Further, the respondent’s income had significantly increased over the years following the original order. Despite the fact that the order did not explicitly mandate the annual exchange of financial information, the court found that as a result of the respondent’s lack of ‘fulsome disclosure’ in this regard, he had effectively enjoyed the benefit of paying less spousal support than he would have been expected to pay had he made the claimant aware of his increased income. Had the respondent disclosed these increased to the claimant over the years, it is likely that the court would have been satisfied that the claimant been adequately compensated after all.

Ultimately, the court did not terminate the respondent’s spousal support obligation. Instead, it increased the amount of spousal support payable by the respondent by $800 per month (from $1,100 to $1,900) to continue indefinitely. This case underscores the importance of ongoing financial disclosure in the realm of family law.

This article is intended for information purposes only and should not be taken as the provision of legal advice. Richard A. Cleveland is lawyer whose practice focuses on family, wills and estates, and employment law. He is a partner with the law firm of Cleveland Doan LLP and can be reached at (604)536-5002 or rick@clevelanddoan.com.