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w w w . c a n a d i a n l a w y e r m a g . c o m M A Y 2 0 1 9 9 R E G I O N A L W R A P O N T A R I O JUDGE ALLOWS REDACTIONS ON CRYPTO-CURRENCY DISCLOSURE IN CHILD SUPPORT FEUD A n Ontario judge says a father may provide redacted disclo- sures of his crypto-currency assets in a child support dispute. The father and respondent told the court that there was "a sub- stantial risk that production of information could lead to attacks and give third parties the ability to access and perhaps steal these assets," according to the April 5 Superior Court of Justice decision, M.M.D. v. J.A.H. Justice Llana Nakonechny wrote that there was a greater risk of prejudice to the father if he were required to produce the unredacted records. "I have no expert evidence on this issue. It is clearly a volatile, emerging, intangible source of wealth which the courts will have to grapple with more frequently in future," wrote Nakonechny. Evan Thomas, counsel at Osler Hoskin & Harcourt LLP in Toronto, who was not involved in the case, says the decision will be of interest to family lawyers and commercial lawyers alike, given that there is so little case law in the area of crypto-currency. For example, he says, privacy around crypto-currency holdings also came up in the context of a lawsuit involving creditors and Canadian company Quadriga. Thomas noted that there have been reports of crypto-currency holders being attacked. "Looking beyond simply family law matters, there are going to be issues of disclosure of information about crypto-currency assets in potentially any kind of litigation. That information may end up being filed in court. Then what's interesting is it can, absent a ceil- ing order, become a matter of public record," says Thomas. "The individual who had the crypto-currency was concerned not just for his privacy but also his personal security if information about his crypto-currency holdings was filed in court." The applicant and respondent are parents to 24-year-old uni- versity student "S.H.," according to the decision. The mother and applicant "has no income other than the $1,200 per month taxable child support she receives from the Respondent," although she has used savings, upcoming inheritance and money from a friend and romantic partner to pay for legal expenses, living costs and S.H.'s education, summing to annual expenses of $72,822 per year, Nakonechny wrote. The respondent is the self-employed producer of videos for the deaf and hearing impaired, with minimal debt and yearly expenses of $383,649, including monthly child support pay- ments for two other children of $2,500 and $2,100 each. However, the respondent's earnings were disputed in the case, including his crypto-currency assets. The child support case had stagnated since 2006, until the applicant said she learned in 2017 that the respondent was worth "millions of dollars." The respondent said his income was $225,000 in 2015, $249,000 in 2016 and $172,000 in 2017 (aside from a capital gain of about $2.8 million that year from "liquidating"). But the applicant said the gross earnings from the business were between $600,000 and $1,000,000, pointing to his yearly expenses, a Cirrus aircraft, $3 million in managed funds and crypto-currency valued between $10 million and $18 million depending on the date. The value was $9,502,416 on Feb. 8. "She questions the Respondent's failure to provide actual evidence of the value of this investment and seeks production of unre- dacted statements of the Respondent's crypto- currency holdings," the decision said. Aaron Grinhaus, principal at Grinhaus Law Firm in Toronto, says the technology behind crypto-curren- cy is designed to be as transparent as possible but things can get tricky if there are multiple crypto-currencies involved or if the case requires records from exchanges. However, he says, there may be ways for a litigant to share their "public key" to reveal transaction details without revealing their "private key," which is akin to an ATM PIN. He also says that, unless an asset is cashed out, it can be difficult to pin the valuation due to fluctuations. — Anita Balakrishnan Evan Thomas says a recent Superior Court decision will be helpful beyond the family law context. © 2019 Thomson Reuters Canada Limited TR713399-NK Do you know the practical effects of legalized cannabis in Canada? Rely on our trusted content for answers. Our one-stop resource centre features new cannabis-related publications that are available to help you navigate the complexities of Canada's new cannabis law. 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