L. Ongoing Disclosure

• Author: Julien D. Payne - Marilyn A. Payne
• Pages: 229-231

Page 229

Pursuant to section 25(1) of the Federal Child Support Guidelines, a spouse or former spouse against whom a child support order has been made must provide financial information annually on the written request of the other spouse or former spouse. Section 25(1) provides a convenient reference point to ascertain whether a court has previously undervalued the obligor’s earning capacity.⁷³⁶Any agreement that purports to limit the statutory right of a parent to request such annual financial disclosure is unenforceable by virtue of section 25(8) of the Federal Child Support Guidelines.⁷³⁷Many separation agreements include an express provision for annual financial disclosure and a duty to make such disclosure may be implied under a separation agreement.⁷³⁸Absent any statutory or contractual duty or any prior judicial direction for ongoing financial disclosure in the existing child support order, a parent’s failure to disclose an increased annual income does not automatically trigger entitlement to a retroactive increase in the child support order.⁷³⁹Section 25(1) of the Federal Child Support Guidelines operates independently of the court’s discretion to order ongoing financial disclosure and may render exercise of the judicial discretion unnecessary.⁷⁴⁰Where there is an existing court order providing for the annual exchange of financial information by the parents by May 15^th of each year, it is an abuse of process, in the absence of any exceptional circumstance, for a parent to seek financial disclosure more frequently than once yearly.⁷⁴¹In granting, refusing or varying an order for child support, it is not uncommon for courts to expressly direct either or both of the spouses to provide copies of their respective income tax returns to the other spouse or former spouse within weeks of having filed their returns.⁷⁴²A court order for annual financial disclosure may be appropriate where the obligor’s income is based on commissions⁷⁴³or is likely to improve.⁷⁴⁴Non-compliance with a court order for the timely production of income tax returns and Canada Revenue Agency assessments and reassessments may be penalized by an order for substantial costs being made against the party in default.⁷⁴⁵

Page 230

When ordering annual financial disclosure, the court may direct that an obligor’s documents shall be notarized because of previous contemptuous conduct in withholding information and providing misleading information.⁷⁴⁶A court may order the annual disclosure of business or corporate information, such as the income tax returns, balance sheet and statement of income and retained earnings for the previous year.⁷⁴⁷An order for the annual disclosure of specified corporate documents may be deemed necessary to ensure that child support remains at an appropriate level.⁷⁴⁸Where child support payments are ordered to be made to the Director of Maintenance Enforcement, the court may order the obligor to supply information concerning his or her income or any change of address to the Director, together with a copy of his or her annual income tax return and notice of assessment.⁷⁴⁹A failure to make ongoing income disclosure may be remedied by a retroactive child support order.⁷⁵⁰Where minutes of settlement provide for the variation of periodic child and spousal support in the event of a material change of circumstances, a spouse and parent whose financial circumstances thereafter change may have an implied obligation to notify the other spouse of these changes and a failure to do so may justify orders for retroactive child support and retroactive spousal support to a date...