Can a Friend or Family Member of a Litigant In Family Court Get Into Trouble By Helping to Deceive the System?

A Friend or Family Member Who Improperly Helps a Former Spouse to Defraud the Other Former Spouse By Hiding Assets or Income and Thereby Helping to Mislead the Family Court Process May Be Found By the Family Court As Committed the Tort of Conspiracy and Ordered to Provide Compensation.

A Helpful Guide For How to Determine and Understand What Is Unlawful Conspiracy By Friends and Family Members

Lawsuit Document Involving Conspiracy Issues The family court process is often very painful and difficult.  For many people, the separation and divorce process, including the legal procedures, are an extremely emotional experience involving a significant period of anger, hurt, and fear.  Accordingly, it is quite normal, beneficial, and reasonable, for family court litigants to reach out to friends and family members for the support that can help to ease the emotional struggle.

With the above said, a problem arises when friends and family members become involved in efforts to manipulate the system as a means of helping the family court litigant.  This manipulation of the system may arise from friends and family members who are willing to assist in the hiding of financial assets, the making of false statements and accusations, among other things.  These friends and family members may be motivated by a desire to help the litigant to gain an advantage or to help the litigant to inflict some revenge upon a former spouse, or for other reasons.

The Law

For many years, there was little, if any, potential consequences for friends and family members who provided improper support to family court litigants.  Only in very rare circumstances would criminal charges arise when friends and family would use unlawful conduct to provide improper help to a family court litigant.  Equally rare, was a separate civil court legal action brought against the friend or family member.  Accordingly, with little to fear, the friends and family members of family court litigants were often emboldened to hide money, make false abuse allegations, among other things, while holding the belief and understanding that the family court is without the power to do anything and that the police and criminal court system are without the interest to do anything.

However, recently in the case of Leitch v. Novac2020 ONCA 257 the Court of Appeal confirmed that friends and family members who improperly assist a family court litigant to hide money from the former spouse may be addressed by the Family Court for the tort conspiracy within the family law proceedings between the two spouses.  Specifically, the Court of Appeal said:

[44]  As the Supreme Court suggested in Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 34, nondisclosure is the cancer of family law. This is an apt metaphor. Nondisclosure metastasizes and impacts all participants in the family law process. Lawyers for recipients cannot adequately advise their clients, while lawyers for payors become unwitting participants in a fraud on the court. Judges cannot correctly guide the parties to a fair resolution at family law conferences and cannot make a proper decision at trial. Payees are forced to accept an arbitrary amount of support unilaterally determined by the payor. Children must make do with less. All this to avoid legal obligations, which have been calculated to be a fair quantification of the payor's required financial contribution. In sum, nondisclosure is antithetical to the policy animating the family law regime and to the processes that have been carefully designed to achieve those policy goals.

[45]  There is a related malady that often works hand-in-hand with nondisclosure to deny justice in family law proceedings. The problem is what I will call “invisible litigants.” These are family members or friends of a family law litigant who insert themselves into the litigation process. They go beyond providing emotional support during a difficult time to become active participants in the litigation. Usually their intentions are good, and their interference makes no difference in the ultimate result. However, sometimes they introduce or reinforce a win-at-all-costs litigation mentality. These invisible litigants are willing to break both the spirit and letter of the family law legislation to achieve their desired result, including by facilitating the deliberate hiding of assets or income.

[46]  If we were to accept the analysis of the motion judge, co-conspirators who engage in such behaviour could do so with impunity. Contrary to the observation of the motion judge, conspiracy is not a “blunt instrument” to respond to this misconduct. It is a valuable tool in the judicial toolbox to ensure fairness in the process and achieve justice. If the tort of conspiracy is not available, then co-conspirators have no skin in the game. Their participation in hiding income or assets is a no-risk proposition. If their conduct is exposed, all that happens is that the payor will be forced to pay what is appropriately owing. If there is to be deterrence, there must be consequences for co-conspirators who are prepared to facilitate nondisclosure.

[47]  There is a further practical reason for permitting the use of the tort of conspiracy in family law claims. Where income or assets have been hidden with the assistance of a co-conspirator, often the family law litigant will be effectively judgment-proof. That, after all, is the whole purpose of the conspiracy. In those circumstances, the imputation of income or the inclusion of hidden assets into the net family property calculation will be a futile exercise, as the recipient cannot collect on what is owing. A judgment against a co-conspirator will often be the only means by which a recipient will be able to satisfy a judgment.

The result is that the friends and family members who conspire to help conceal income or assets of a family court litigant may now be involved within the Family Court proceedings with the potential of facing an Order to compensate the victim spouse and the victim spouse is saved the need and cost to initiate separate civil litigation proceedings against the friends and family members of the former spouse; an expense of time, emotion, cost, that a family law litigant was in the past all too often unable to pursue while also bearing the challenges of the family law litigation.  Essentially, the family law proceedings, and what would previously require separate tort law civil litigation proceedings, may now be brought under review by the Family Court.

Summary Comment

With the ruling by the Court of Appeal in the case of Leitch v. Novac, the door is open for the Family Court to involve the friends and family members of a former spouse when such friends and family members conspire to conceal assets or money from the other former spouse.  Essentially, the Court of Appeal ruling states that concerns for the tort of conspiracy are a concern for review by the Family Court and that liability may arise against the friends and family members who become improperly involved.

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