Fishing Expeditions Can be Costly

Judges frequently penalize litigants who fail to fully disclose their financial circumstances in family law cases. Phrases like “Non-disclosure is the cancer of matrimonial litigation” (Cunha v. Cunha, 1994 CanLII 3195 (B.C.S.C.)) are unfortunately shop-worn because of how frequently parties fail to meet their obligations to disclose. The penalties for non-disclosure include financial penalties, outright dismissal of cases, and even jail.

Over-broad requests for disclosure can be just as vexing. Unscrupulous counsel sometimes use document requests as a way of wearing down the opposition in a paper-fueled war of attrition. Hence the equally shop-worn phrase that a party’s requests amount to a “fishing expedition”.

But while courts often deny over-broad requests, they rarely penalize the party who made the request. Madam Justice Norell did just that in Pennors v. Pennors, 2020 BCSC 550. In Pennors, the parties had exchanged sworn financial statements in 2016, and entered into a final consent order shortly thereafter. Two years later, the husband started a new Supreme Court action claiming that his ex-wife had failed to fully disclose her assets at the time of the Final Consent Order.

As matters progressed, the husband made a series of claims of non-disclosure. The wife was able to show that all of the husband’s claims were without merit:

  1. The husband claimed that the wife had not disclosed the disposition of two properties in Poland that had occurred in 2000 (16 years before the date of the final order). The wife explained that she had received five lots in Poland from her parents in 1995, and at her parents’ request had returned two of them in 2000. The remaining three properties stayed with the wife and had indeed been disclosed at the time of the final order. By the time of Justice Norrell’s reasons, the husband had apparently abandoned his claim that the wife had failed to disclose properties in Poland.
  2. The husband claimed the wife had an undisclosed account at the “Kredyt Bank” in Poland based on the results of an Internet search done through a Florida-based company called “Asset Locate Search”. These searches also purported to reveal that the wife was “associated” with accounts at CIBC and RBC. The wife was able to show that this bank had closed before the parties had even separated. The husband accordingly withdrew his claim that the wife held a Kredyt Bank account.
  3. With respect to the purported undisclosed accounts at CIBC and RBC, the wife produced letters from both banks confirming that she had no accounts at either of those institutions from eight months before the date of separation to the date of the Final Order. The husband took issue with the dates covered by the letters and speculated that the wife might have closed the accounts before separation but in anticipation of it.
  4. The husband said the wife had a pension plan that she did not disclose. There was no good evidence of the existence of the pension plan and the husband later withdrew this allegation as well.    

These various “swings and misses” did not deter the husband. The wife brought an application to summarily dismiss the husband’s entire court action as an abuse of process, while the husband brought an application for still more disclosure from the wife, this time seeking statements for any CIBC or RBC bank accounts held by the wife from January 1, 1993, to December 31, 2013.

The Court dismissed the husband’s document production application. He had no more than suspicions that the wife had hidden accounts. Although the husband attempted to rely on the Asset Locate Search results, the court put little or no weight on these searches, and for good reason:

  • it was not clear how a Florida company could have access to Canadian bank records;
  • there was no evidence as to how the Asset Locate Search obtained the information it purported to have;
  • the Asset Locate Search results purported to reveal an account at a bank that had been closed for years;
  • the Asset Locate Search results did not include accounts actually held by the wife; and
  • the Asset Locate Search results themselves said the results were not guaranteed and that they might be mistaken.

The Court did not just dismiss the husband’s document production application. It went further, and dismissed the husband’s action outright. The husband simply had no evidence of non-disclosure, just mere “suspicion”. Without a basis to that suspicion, his claim was bound to fail.

The Court then turned to the matter of costs. While satisfied that the husband did not have a basis to bring his claim, the court found that his behaviour was not reprehensible. The Court initially determined that ordinary costs were all that was merited.

Snatching disaster from the jaws of mere defeat, on the very day the Court was to issue its reasons, the husband brought on a further application to adduce new evidence and to obtain further bank records, this time from the parties’ 15-year-old daughter. The new evidence from the husband included yet another Asset Locate Search result.  The husband wanted records from his daughter because he now “wondered” whether the wife had set up accounts in the daughter’s name.

This new application was a step too far, and the Court ordered special costs against the husband. A rare cautionary tale for parties whose desire to “get to the bottom of things” goes way beyond the reasonable. Non-disclosure may be the cancer of matrimonial litigation, but not to the point where the cure becomes worse than the disease.

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About Alex Boland

Partner – Kelowna

Every life contains great transitions. I hope to help my clients through their separation with compassion, integrity, intelligence and dignity. I try and see each file on its own merits, and this means that I want to work with my clients to develop an approach that moves them forward towards their particular goals. Practically speaking, I prefer to take a collaborative approach to files where possible; I like to apply the specialized knowledge and competencies I've developed over my practice to challenging problems; and I like to exercise compassion in all that I do.