Spouses will often make it challenging for counsel and valuation experts to do their jobs by playing the game “catch me if you can” to disclosure requests.
By Bruce Roher (Ontario)
In the case of Braun v. Braun (2011 ONSC 3787 (CanLII), Docket FS-10-357996), the applicant husband was claiming that he had family property at the date of marriage of $2.67 million and accordingly he had no net family property at the date of separation. He further claimed that his income had been reduced significantly in 2011. The wife’s valuator had requested information and the husband’s response to this was that most of the documents sought were in the wife’s possession or control. The wife had acknowledged that she had copies of some of the documents and had provided a list of the documents in her possession.
The Court held that the wife is entitled to obtain disclosure and that “It is not an answer to the disclosure requests for the applicant to say that the respondent has his files. The applicant must make the disclosure or advise that he neither has the document nor is it possible to obtain a copy of the document.”
Catch Me If You Can: You Can Run, But You Can’t Hide
The Court stated that many of the applicant’s responses were cavalier and that they amounted to “figure it out yourself.” For example, the husband was asked to provide supporting documents for credit card expenses recorded as business expenses. It is important for the valuator to examine the supporting invoices in order to determine if the expense is personal in nature. The husband’s response was that this request had been satisfied because he had provided a chart characterizing the expenses and credit card charges and that the expenses were in line with prior years. The Court held that this did not answer the request.
The Court provided some general principles as to the types of disclosure that were producible and not producible. Questions and production of documents regarding the husband’s business travel and telephone expenses were considered producible to ascertain whether the characterization of business versus personal was reasonable. On the other hand, personal questions regarding an itemization of gifts the husband had given his companion were not required. Based on these general principles, the outstanding refusals and questions taken under advisement, the Court ordered that the valuator’s list of information required be answered.
Bruce Roher, CA•IFA, CBV, CFE is a partner in the valuations and litigation support practice at the Toronto office of Fuller Landau LLP. The firm’s website is www.fullerlandau.com.
In divorce, valuing the business in isolation may cause you to miss key financial information. A comprehensive, 360-degree approach could yield radically different – and more accurate – results.