Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Non-Disclosure in the Context of a Domestic Contract: Beware!

Non-Disclosure in the Context of a Domestic Contract: Beware!

By:

Mann Lawyers

Posted August 25, 2020

As family lawyers, we are often contacted by clients who want a domestic contract negotiated, drafted and/or reviewed as quickly as possible. However, before this process can begin, there is an initial step that the spouses involved need to take. This step is the exchange of full and frank financial disclosure.

Exchanging full and frank financial disclosure is the process in which spouses provide each other with complete information regarding their respective financial circumstances.

This step is fundamental to the negotiation, drafting and review of any domestic contract. In fact, it is a crucial step in any family matter, whether the matter is in Court, is being negotiated privately with the assistance of lawyers or has already been resolved between the parties among themselves. It ensures that each spouse is fully informed of the other’s financial circumstances prior to making decisions on their family matter and/or entering into a domestic contract.

Spouses are commonly seen wanting to skip this step entirely for various reasons such as :

  1. they want to incur as little on legal fees as possible;
  2. they are amicable with each other and don’t want to “rock the boat”;
  3. they are already “aware” of each other’s financial circumstances;
  4. they have already resolved their family matter among themselves, on their own terms.

Whether or not spouses have the above-noted reasons, exchanging financial disclosure is necessary.

As expressed by Justice Binnie in a Supreme Court of Canada decision, Leskun v. Leskun,  non-disclosure of a party’s financial circumstances is the cancer of family law and promotes inadequate settlements.

Without complete and accurate financial disclosure from both spouses, lawyers are unable to properly advise clients on their settlement/contract or assist them in making an informed decision during negotiations.

Further, failure by either spouse to proceed with this step can leave a domestic contract vulnerable to a spouse challenging its validity and having it set aside by a Court in the future.

Pursuant to section 56(4) of the Family Law Act, a Court can set aside some or all terms of a domestic contract if :

  1. a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
  2. if a party did not understand the nature or consequences of the domestic contract; or
  3. otherwise in accordance with the law of contract.

It is therefore important that spouses be transparent and cooperative in providing their respective financial disclosure prior to entering a domestic contract.  Inaccurate, incomplete or misleading financial disclosure can have serious consequences that may cost a spouse much more money and grief in the long run.

This blog post was written by Stephanie Simard, a member of the Real Estate and Family Law teams.  She can be reached at 613-369-0385 or at stephanie.simard@mannlawyers.com.

More Resources

Blog |
Employment, Labour, and Human Rights, Commercial Litigation

By: 

Posted May 23, 2023

Both in my commercial and employment litigation practice, I encounter Ontario business owners faced with serious charges laid against them under the Provincial Offences Act[...]
Blog |
Family Law

By: 

Posted May 18, 2023

The recent Supreme Court of Canada decision in Anderson v. Anderson, 2023 SCC 13, provides guidance on domestic contracts and the enforceability of an informal[...]
Blog |
Environmental Law

By: 

Posted May 16, 2023

When many people think of contaminated sites, they think of the usual suspects such as industrial properties and gas stations.  They may not think of[...]
Blog |
Business Law

By: 

Posted May 9, 2023

Often business owners reach a point where they are considering the sale of their business either through the sale of shares or the sale of[...]
Blog |
Family Law

By: 

Posted May 2, 2023

Overview of Tort Claims in Family Matters Tort claims can be made in family law matters, so as to prevent a multiplicity of proceedings and[...]
Blog |
Employment, Labour, and Human Rights

By: 

Posted April 25, 2023

In a case that recently was decided from the Court of Appeal of Ontario called Celestini v Shoplogix Inc., 2023 ONCA 131, the Court had[...]

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.