Tisha Campbell-Martin, best known for her role on the 1990s sitcom “Martin”, is accusing her estranged husband Duane Martin of hiding and misappropriating money while they were married. As of the time of writing, it is uncertain how much money Campbell-Martin believes Martin has hidden from her. Campbell-Martin is now asking the judge in her case to take action, in addition to her request that they award her spousal support and deny Martin spousal support. This comes on the heels of Campbell-Martin filing for divorce earlier this year, and the couple filing for bankruptcy in 2016.
If Campbell-Martin and Martin were applying for a divorce in Ontario, the Divorce Act, Family Law Act, and Family Law Rules would apply. Martin’s alleged hiding of money could be considered “spousal misconduct” under the Divorce Act. However, section 15(5) of the Divorce Act says that when a court makes an order for spousal support, it cannot take into consideration any spousal misconduct relating to the marriage. This means that in Ontario, Campbell-Martin would likely not be able to use Martin allegedly hiding money to directly affect the amount of spousal support ordered under the Divorce Act, if any.
Under the Family Law Act, when either party applies for a determination of equalization, or the division of the net family property, they must provide a financial statement disclosing all of their property, debts, and other liabilities from the date of the marriage, the valuation date, and as of the date of the statement. This is supported by Rule 13 of the Family Law Rules requiring financial disclosure for any application, answer or motion containing a claim for support, property, or exclusive possession of the matrimonial home. This includes a duty on the person providing the financial disclosure to correct any errors or omissions in their financial disclosure. If the party fails to do so, or files financial disclosure not in compliance with the Rules, the court may order that the party serve or file the document and that the party pay costs.
Therefore, if Campbell-Martin was applying for divorce in Ontario she could move that the court order Martin to provide full and complete financial disclosure, including any money that he allegedly hid from her. The onus would be on Campbell-Martin to demonstrate on a balance of probabilities that Martin’s financial disclosure was either incomplete or otherwise not in compliance with the Family Law Act or Rules.
However, there is also the matter of Campbell-Martin and Martin’s bankruptcy to consider. The recipient of an equalization payment under the Family Law Act would be considered an unsecured creditor for bankruptcy purposes. Generally speaking, secured creditors are “first in line” for any assets under bankruptcy, and the trustee, the person in charge of the bankrupt’s assets, is obligated to distribute those assets. Therefore, any equalization payment sought would be practically dependent upon whether or not there were any assets left over after paying secured creditors. While Martin allegedly hiding money may affect the amount available to secured creditors, it would have to be a large enough amount to satisfy the debt to the secured creditors before it would begin to affect the equalization payment. This is assuming the equalization payment is first among the unsecured creditors, which it may not be.
Situations such as this make it all the more important to request and provide complete and updated financial disclosure in the event of a separation or divorce. While a lack of financial disclosure can have serious consequences for your family law matter, it can also attract other legal consequences, as here.