The Cancer Of Family Law: Non-Disclosure Of Financial Assets

September 7, 2012
Leisha Murphy

Non-disclosure of assets is the cancer of matrimonial property litigation

-Cunha v. Cunha (1994), 99 B.C.L.R. (2d) 93 (S.C.)

Non-disclosure of financial information, whether real or imagined, is almost invariably claimed by one spouse during family litigation. This, in my view, results from the deep level of mistrust that is usually engendered by the separation itself. Especially in circumstances where the spouses were not fully aware of each others’ assets during the marriage, almost nothing can reconcile a spouse’s fear that the other person is “hiding” something from them.

Short of hiring a forensic account, it can be difficult (though not impossible) to locate hidden assets.  Knowing the institutions and accounts of your spouse before separation can go a long way to mitigating this situation. Typically, there is a great deal more trust between spouses before separation, facilitating a greater flow of information. Once parties separate, it can quickly turn into every person for themselves.

There are remedies, however, if you believe your spouse may be hiding assets from you. Once non-disclosure has been established at any stage of court proceedings, the onus is on the non-disclosing party to satisfy the Court that s/he has subsequently given full disclosure. If, by the end of trial, the Court is satisfied that full disclosure has actually been made, an award of costs might be the only appropriate remedy.

If the non-disclosing party has not satisfied the court that he/she has given full disclosure, the Court may infer that the value of the undisclosed assets is of equal value to the disclosed family assets. In this scenario, up to 100% of the disclosed family assets can be awarded to the spouse who has provided full disclosure to the Court. For example, in the case of Dong v. Liu, 2008 BCSC 1795, the Court found that the plaintiff had concealed assets during the course of litigation and as a result apportioned the disclosed family assets 75% in the defendant’s favour. The Court of Appeal ((2009) BCCA 306, paras. 9 and 24) upheld this finding.

Take some precautions and learn about your partner’s assets before separation.

Leisha Murphy
Leisha Murphy
Partner (Vancouver)
Connect Family Law

Leisha has practised exclusively in the area of family law since being called to the British Columbia Bar in 2010. Before opening Connect Family Law in 2015, she practiced in the family law group of a leading British Columbia law firm.