N. Disclosure by Third Parties or Non-parties

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 233-240

Page 233

Manitoba courts have asserted that, in the absence of a claim of undue hardship under section 10 of the Federal Child Support Guidelines, there is no basis on which a court can consider anything but spousal income and, consequently, financial disclosure by third parties living with a spouse is not compellable.⁷⁶⁹While this is true in circumstances where the application is confined to the table amount of child support, it may be inappropriate in circumstances where the Guidelines confer a discretionary jurisdiction on the court to deviate from the table amount of child support having regard to the financial ability of a parent or his or her condition, means, and other circumstances. For example, where the application involves an adult child who is pursuing post-secondary education away from home, the presumptive rule under sections 3(1)(a) and 3(2)(a) of the Guidelines in favour of the table amount may be inappropriate. Then, section 3(2)(b) of the Guidelines would be triggered with the consequence that the court must determine the appropriate amount of child support having regard to "the financial ability of each spouse to contribute to the support of the child." This phrase is broad enough to take account of a common law spouse’s contributions to a parent’s household or other expenses, even if the common law spouse is under no legal obligation to support the child.⁷⁷⁰

Trial judges should be receptive to making orders for full financial disclosure by parties formerly living in a married or marriage like arrangement⁷⁷¹in circumstances where the Federal Child Support Guidelines confer a discretion on the court that is conditioned on the means or financial ability of a spouse to contribute towards a child’s support. It does not follow that a court has carte blanche to order the disclosure of any financial information respecting an individual who is not a party to the proceeding. The party seeking production must show that the proposed intrusion into the third party’s affairs is relevant and necessary to enable the court to assess the situation.⁷⁷²A bald statement in an affidavit may

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not provide a sufficiently compelling case for disclosure.⁷⁷³A court should not be asked to compel a party to provide financial information concerning a non-party who has no notice of the proceedings and no opportunity to make his or her own submissions to the court.⁷⁷⁴

In Nelson v. Nelson,⁷⁷⁵Veit J., of the Alberta Court of Queen’s Bench, concluded that the current spouse of a recipient of child support is not under a legal duty to disclose his or her income under the Federal Child Support Guidelines, although there is a possibility of an adverse influence being drawn against the recipient spouse where a judicial discretion arises that requires the court to have regard to the "financial ability" or "means" of a spouse, as occurs, for example, under section 3(2)(b) of the Guidelines with respect to children over the age of provincial majority, under section 4(b)(ii) of the Guidelines where the obligor’s annual income exceeds $150,000, on a claim for special or extraordinary expenses under section 7 of the Guidelines, in circumstances involving shared custody under section 9 of the Guidelines, and in cases of undue hardship falling within section 10 of the Guidelines. In Hebert v. Orsini,⁷⁷⁶Veit J. held that a mere allegation of undue hardship will not suffice to justify an order for financial disclosure by a parent’s new spouse. A parent who has a support obligation must establish a prima facie case that the stringent criteria of "undue hardship" within the meaning of section 10 of the Federal Child Support Guidelines have been met before an order will be granted that requires financial disclosure to be made by a non-party.

The word "means" in section 7(1) of the Nova Scotia Child Support Guidelines includes the income and assets of the applicant and of the applicant’s spouse.⁷⁷⁷When seeking special or extraordinary expenses thereunder, the applicant must disclose his or her household income. A court cannot require a non-party to disclose income information but can order the applicant to disclose "all resources, assets, income from investments, spouse’s income and investments."⁷⁷⁸In Saskatchewan, it has been held that in the absence of undue hardship within the meaning of section 10 of the Federal Child Support Guidelines, a parent’s spouse is under no obligation to provide any financial disclosure. If undue hardship is proven, the court may, on application pursuant to Saskatchewan Queen’s Bench Rule 621(1), order another member of the parent’s household to file Part 1 of a financial statement and a copy of that person’s income tax information for the most recent taxation year only.⁷⁷⁹In Kent v. Kent,⁷⁸⁰the Newfoundland and Labrador Court of Appeal formulated a nuanced approach to mandatory financial disclosure by persons who are married to or cohabit with support obligors. The appellate court articulates the following general principles:

93 The new spouse or partner of a payor spouse has no obligation to support the payor’s former spouse: Davignon v. Davignon (2001), 5 R.F.L. (5th) 37 (Ont. C.A.). Consequently, a court should not simply include the partner’s income, in whole or in part, in the payor’s

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income to determine his or her ability to pay spousal support: Meiklejohn v. Meiklejohn (2001), 19 R.F.L. (5th) 167 (Ont. C.A.). However, a payor’s new spouse’s income and other resources may be taken into account in establishing a payor’s ability to pay because the new spouse or partner is expected to contribute his or her fair share to their household expenses.

94 With respect to child support, in the absence of a new spouse or partner having assumed the parent role to the children of the former marriage, she or he has no obligation to support the payor’s children from that former marriage . . . . However, as in spousal support, the presence of the new spouse or partner may have an impact on the payor’s ability to pay.

Extrapolating from these broad general principles in the light of the cited case law, the appellate court endorsed the following legal propositions:

(i) The income of a second spouse or partner is not considered to be the income of the support obligor. What needs to be considered is the economic impact of the presence of that person on the support obligor’s ability to pay. The impact may be neutral or the support obligor’s expenses may have increased or decreased as a result of sharing the household with that person.

(ii) To reduce the expenses of the obligor by the income of the new spouse or partner would be to do indirectly what you cannot do directly — add the income of the new spouse to that of the obligor. However, it would be equally wrong for the obligor to increase his or her household expenses by assuming all the responsibility for a new family, where the other adult in the household is in a position to contribute.

(iii) Where the law permits reference to the means or financial capacity of the support obligor, it does not follow that the income and other financial information of his or her new spouse or partner, including information regarding companies owned solely by that spouse or partner, must, ipso facto, be made available to the court. Such a result could unnecessarily...