High-Stakes Litigation Results in Costs Award of $1.4 Million to Wife

It wasn’t that long ago that family law was considered the “poor sister” of commercial and corporate litigation, labelled “pink collar” law and considered a less worthy pursuit than other areas of the law. Happily that characterization has been abandoned for some time and rightly so.

Cases like Blatherwick v. Blatherwick 2017 ONSC 3968 (Canlii) and many others like it, point to the reality that family law embraces complex legal concepts including corporate valuations, off-shore assets with jurisdictional issues, and complicated income analysis, to name just a few.

When you have family litigation where the wealthy spouse refuses to provide information and documents, lies and evades the truth, and enlists business partners to assist in the obfuscation, it is not unusual to see large costs awards levied against the fraudulent litigant. Blatherwick is a perfect example of such a case.

Where there has been “reprehensible, scandalous, or outrageous conduct on the part of one of the parties”, the successful party will be awarded “special costs”, which represent the actual legal fees he or she has paid to his or her lawyer. In Blatherwick the successful wife was awarded $1,461,000 in circumstances where the husband made a mockery of fair play after a marriage lasting 39 years.

Mr. Blatherwick’s litigation “sins” were numerous including:

1. His admission that his business partners formed a “brotherhood of trust” and would circle the wagons in the case of any matrimonial dispute;

2. His admission that he was a liar and a cheat and that his business was conducted with those values;

3. His admission that his business was conducted in China and the British Virgin Islands and that the few documents produced were utterly unreliable.

4. His ever-changing evidence, despite previous admissions being made under oath;

5. His flagrant and deliberate disregard of court orders, in particular an order that restrained him from depleting his assets. However, the court found that in breach of the order he paid his lawyers over $800,000;

6. He failed to pay interim support to his wife and was in arrears of over $500,000;

7. He gave over $900,000 to several girlfriends in the Philipines and also made fraudulent Canadian immigration applications on their behalf, telling the authorities that his wife was deceased, and on another occasion that he was not married.

8. He made a voluntary assignment into bankruptcy such that his trustee seized and sold all his Canadian assets. He valued his off-shore companies at one dollar, despite evidence of $42 million dollars in annual sales;

In lengthy Reasons the Court held that Mrs. Blatherwick, in her early 60’s, was entitled to lump sum support in the amount of $5,985,216 based on an imputed income to her husband of $1.4 million dollars. Notably, his Canadian tax returns recorded income of about $48,000 per annum. She was also awarded compensation for her interest in the family assets in the amount of $3,573,807.

The Court annulled Mr. Blatherwick’s bankruptcy and scheduled a hearing to determine if his lawyers should be held in contempt of court for receiving funds from their client while he was under a restraining order.

The question remains, however, in the face of Mr. Blatherwick’s litigation behaviour, whether his wife will actually receive the funds she is owed. With her husband living in the Phillipines, and all his valuable assets located off shore, it seems highly unlikely that collecting her award will be a simple task. Although his Canadian passport was seized by Family Maintenance Enforcement authorities, it is very likely he has acquired a Phillipines passport.

These are extremely difficult cases and often the Court’s findings and orders are hollow, in the absence of compliance from a spouse who has already proved to be a rogue.

Lawdiva aka Georgialee Lang