Can you benefit by not providing proper financial disclosure?

According to the Court of Appeal in Gray v. Rizzi, the answer to the above question is ‘no’. In this case, a final order from 2005 awarded significant child and spousal support to the wife even though the husband, who was self-employed, had never made proper financial disclosure to the wife. Had he made the property disclosure at the time, the court would not have needed to impute income to him of $133,000.00 since his income prior to 2005 was, in fact, considerably lower. For the period from 2006-2011, for example, his income varied between $60,000 and $68,000.

The husband brought a motion to change in 2009 based on his reduced income for the period from 2003-2013. At trial, the trial judge concluded that the husband was entitled to vary the final order because his income was not $133,000.00. In other words, the original order form 2005 was incorrect. The trial judge went on to vary the retroactive support he owed his wife. In the end, his wife was ordered to repay the husband approximately $113,000.00.

The Court of Appeal, however, found that the trial judge’s decision rewarded the husband for failing to make proper disclosure at the relevant time. The husband didn’t file a financial statement until 2013- when the trial for his motion to change the 2005 order was about to start. This was 4 years from the date when he initiated the motion to change proceedings.

The appeal court held that the test for the trial judge’s review of the 2005 order is not whether it was correct or not. If that was the standard, people could simply refuse to provide prompt financial disclosure, and then turn around and bring a motion to change once they decided they were ready to provide it.

Since the husband did experience a material change in circumstances after the date of the final order, he was entitled to vary his support obligations after 2005. From 2006-2013, he paid approximately 44% of what was owing under the original order. However, being entitled to vary your support obligations going forward is different than having your support arrears forgiven.

It didn’t help the husband that he didn’t move to vary the final order in 2005 until 2009. He didn’t cooperate with the Family Responsibility Office in trying to pay his support arrears. Finally, it was a hardship to the wife to have to repay $113,000.00 of support to him.

The moral of the story here is that if you don’t want to pay support based on an imputed income that far exceeds your actual income, then provide proof of your income as soon as possible. And, if you want to vary a final order, don’t delay.