MCGRATH v MCGRATH, 2026 ABKB 684

Ms. Petrovic and Mr. McGrath divorced in 2017. Ms. Petrovic applied for retroactive child support and provided financial disclosure in support of her Application.

During the marriage and until July 3, 2024, Ms. Petrovic was a discretionary beneficiary of a family trust (the “Trust”). The Trust was the sole or majority shareholder of six closely related family-held corporations.

Ms. Petrovic was not a shareholder, director, or officer of any of the six corporations and held no decision-making authority within them. Ms. Petrovic was employed by one of the trust-held corporations, from which she received a salary and access to a company credit card. She also disclosed monetary gifts from her father, including mortgage payments. Mr. McGrath claimed that the source of these gifts was from the closely held family companies held by the Trust.

Mr. McGrath opposed the retroactive child support Application and argued that Ms. Petrovic enjoyed benefits and financial support from sources that substantially enhanced her lifestyle. Pursuant to Rule 5.13, he sought production of the financial statements of all six trust-held corporations for the years 2019 through 2024. Mr. McGrath argued that the disclosure already provided by the Trust was incomplete and disorganized.

Justice Silver first considered the scope of the records sought. The Court emphasized that third-party production applications require careful scrutiny because non-parties are not subject to the same disclosure obligations as litigants. Any Production Order must be proportionate, minimally intrusive, and tailored to produce meaningful and relevant information. Justice Silver found that portions of the request were overly broad. For example, Mr. McGrath sought information related to credit cards “attributable” to Ms. Petrovic despite an absence of evidence that she had access to any credit cards other than the company card already disclosed. The evidence also quantified the personal expenses paid through that card.

The Court then considered whether to exercise its discretion pursuant to Rule 5.13. Justice Silver noted that the Rule permits production from a non-party where the records are under that party's control, there is reason to believe they are relevant and material, and the third party might be required to produce them at trial.

Although the Trust and corporations were controlled by Ms. Petrovic's family, the Court held that the privacy interests of the Trust and the six corporations had to be balanced against Mr. McGrath's interest in obtaining further disclosure. In assessing relevance and materiality, Justice Silver considered whether the requested records could reasonably be expected to significantly assist in determining Ms. Petrovic's financial means for the purposes of the retroactive child support Application.

The Court concluded that Mr. McGrath had not established a sufficient evidentiary basis for production. While the financial disclosure produced by the Trust reflected only the Trust's income and liabilities and did not include the underlying corporate financial statements, Justice Silver rejected the submission that disclosure was warranted simply to determine the "full extent" of the benefits available to Ms. Petrovic. The Court found no evidence supporting an argument under Section 19(1)(d) of the Federal Child Support Guidelines that Ms. Petrovic was diverting income or using the corporate structure to shield or minimize income. The fact that she received certain benefits from some of the corporations did not justify production of the financial statements of all six entities. Similarly, evidence that Ms. Petrovic's father had provided significant gifts did not entitle Mr. McGrath to access his personal financial information or the financial information of corporations from which he derived wealth.

Justice Silver ultimately dismissed the Application for third-party disclosure.