If You Don’t Ask, You Don’t Get

GEO CASUALIt is open season on spouses who own substantial assets, now that s. 89 of the Family Law Act has found its footing in British Columbia jurisprudence.

S. 89 permits a spouse to apply for an “interim distribution” of family property prior to a final division of property where a spouse needs money to settle or litigate the family case, or funds to obtain information and evidence that will assist them to settle or litigate their case.

Prior to the introduction of this section, litigants without access to ready cash were severely prejudiced, often unable to retain counsel or hire accountants and other experts required to prove their case. Longtime case law prevented any distribution of property in order to retain counsel.

Cases now abound and large amounts of money have been ordered to be paid by property owning spouses. In some cases, these spouses have been ordered to mortgage their property or otherwise borrow funds to pay their less well-financed spouses. It is not unusual to see orders of six figures, no small-time amounts.

However, all of the current cases recognize that this financial remedy is restricted to applications for funds prior to trial. Until today, that is.

In Negus v. Yehia, 2018 BCSC 3, a high-conflict case where Ms. Negus has already received $533,500.00 pursuant to S. 89, her counsel had the temerity, on the last day of trial, to make yet another application for funds. She advised the court that her client owed $400,000 in legal fees and sought another interim distribution.

The court judiciously refused the request saying:

“While I have been referred to a number of cases where the court has ordered advances under s. 89, all of those orders were made before trial in order to permit the economically weaker spouse to prepare for and conduct a trial. That has included, where necessary, putting that spouse in a position to pay for expert evidence. The focus is on the fairness of the trial process and the ability of both spouses to effectively put forward all relevant evidence. I have been referred to no case where such an order was made during or after trial.

In this case, I find that the purpose of s. 89 has been achieved, presumably with the help of the advances already ordered. There has already been a trial in which the “playing field” was clearly level and the claimant, with the assistance of experienced family law counsel, was able to vigorously challenge the respondent’s position.
An additional advance at this stage would do nothing further to meet the objectives of s. 89.”

I guess if you don’t ask, you don’t get, but this one took chutzpah!

Lawdiva aka Georgialee Lang

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Hard-Luck Case Leads to Cancellation of Child Support Arrears

DSC01152_2 (2)_2There’s a saying “If it wasn’t for bad luck, I’d have no luck at all”, a sentiment that the litigants in K.S. v. M.B. 2017 BCSC 2390 should heartily embrace.

The parties lived together for 9 years and had a daughter born in 1986. They separated two years later with mother having custody of their child and father paying regular child support. In 2004 a court found their daughter was no longer eligible for child support as she was living independently and working in the sex trade.

In 2010 another judge of the court heard evidence from the parties and made an order that the father owed arrears of child support of $18,543 for the period between May of 1991 and April of 2003. However, the order was not entered until January 2017 and the mother made no efforts to collect the child support monies she was owed.

Tragically in 2014 their daughter, who had been living in California, was found murdered in New Orleans.

The father, who graduated from high school in 1976, began working as a long-haul truck driver, however, in 1990 he fell off the truck roof, a fall that damaged rods in his back placed there in 1974 to treat his scoliosis. He was in a full body cast for a year as a result.

The nineties were not good times for the father. Between 1992 and 1995 he was involved in criminal law proceedings and was convicted for criminal negligence causing death, He served one year of a three-year sentence. Trying to work his way back to productivity he obtained a diploma in computer networking and telecommunications and found work as a computer technician, until his employer went bankrupt.

He went back to truck driving but injured himself on the job and broke three ribs, an injury that compromised his already damaged spine. While recovering he was diagnosed with two different types of cancer and was on chemotherapy from 2013 to 2016. He welcomed the remission, but was unable to be gainfully employed as he could not stand for long periods of time and even walking was difficult. He was also diagnosed with rheumatoid arthritis in his lower back and hands.

The issue before the court was whether is would be “grossly unfair” to cancel the arrears of child support arising from the 2010 order. At the time of the hearing he was 59 years old and surviving on a pension of $1,600 per month, which would terminate at age 65.

On the other side, the recipient parent was also living on a disability pension which was to end in November 2017, following which she would have only her Canada Pension Plan and Old Age Security benefits. She had also suffered from bad health and in 2010 had taken legal custody of their daughter’s child. She advised the court that she needed the arrears to support herself and her grandchild.

The court reviewed the legal principles relevant to an application to cancel arrears, noting the following:

1. Arrears will only be cancelled if the person has no present and no future ability to pay;
2. Delay in enforcing an order for arrears is generally not a legal basis to cancel or reduce child support;
3. Arrears will not be cancelled because the children were “taken care of” financially by others;
4. Arrears payments of a large sum will not be considered a windfall to the recipient parent.

The court commented that the death of a child does not automatically cancel arrears of support, however, it is a factor the court may consider to determine if it would be “grossly unfair” not to do. The court also promptly dismissed the mother’s argument that she required the child support arrears to support her grandchild, a submission that very likely hurt the mother’s case.

Taking into account all of the circumstances, Mr. Justice Ball ordered that all arrears, interest and penalties be cancelled and that each party pay their own costs.

Another sad family law case where poverty plays a central role.

Lawdiva aka Georgialee Lang

Family Law Practice Points from the Ontario Court of Appeal

GEO CASUALIn a case from Ontario, Perri v. Perri 2017 ONCA 1001, the Court of Appeal considered the husband’s arguments that an order for lump sum spousal support for his wife constituted an error in law. The parties had been married for 22 years and had 2 children.

The appeal court noted that the parties had agreed that lump sum support was preferable to monthly payments as their post-marital relationship was marked by animosity.

While the Court dismissed the husband’s appeal, finding that compensatory factors were in play, it did correct two legal errors. The first was the lower court’s order that the wife be designated as the sole irrevocable beneficiary of the husband’s life insurance policy. The error was that there was no indication of an end date with respect to the beneficiary designation. The appeal court inserted the following language to that order:

“until the lump sum spousal support is paid and as security for lump sum spousal
support.”

The second legal error was as a result of the Brampton court registry insisting that counsel include a paragraph in the order that the husband was under a continuing obligation to provide annual updated financial information to his wife. The appeal court confirmed that such disclosure was not required where the order for support was lump sum.

Two practice points arise from this case:

1. The first is that a life insurance designation in a support order is intended to provide security to a receipient spouse or parent in the event of the untimely death of a payor. It is not intended to be a transfer of wealth upon a payor’s death.

2. The second is that while court registry staff are typically very knowledgable and helpful, they are not infallible. The notion of an ongoing disclosure requirement initiated by clerks, where no such order was made, is a stark example of why counsel should remember that it is their responsibility to enter an order that mirrors the court’s judgment or the court clerk’s notes.

Lawdiva aka Georgialee Lang

Wife Returns $1 Million Dollar Cheque to Husband and Seeks Monthly Support

GeorgiaLeeLang057When couples separate one of the first legal issues to consider is whether one spouse should pay the other interim spousal support. Interim spousal support is support intended to ensure that the lower income, or non-income earning spouse has sufficient income to support her or himself until matters are finalized, either though settlement or at trial.

In an unusual case out of Ontario, Bridge v. Laurence, 2017 ONSC 7417, Mr. Laurence presented his separated spouse with a cheque for $1 million dollars, after their 30-year marriage ended.

The parties had been in mediation and he asserted that he and his wife had concluded an agreement whereby she would receive 49.9% of the shares of his very successful company, which included 18% of shares she already owned. He then declared a dividend in her favour of $1 million dollars. He would also receive a similar dividend. Earlier the parties had each received nearly $1 million dollars in the division of other family property. On this basis he concluded that his wife would not require interim support as she would have sufficient funds to support herself.

Ms. Bridge initially advised the mediator that she agreed “generally” to her husband’s proposal, but shortly thereafter changed her mind, after she consulted her lawyer. She sent the cheque back to her husband and said that since she only owned 18% of the company, she was entitled to a dividend of $360,000 and no more, since she was not willing to give up spousal support.

Mr. Laurence, however, refused to provide her with a cheque for $360,000 leading to a stalemate that required court intervention.

The Court was not amused by either husband or wife, mildly scolding them for failing to collaborate to ensure efficient and cost-effective litigation, with consequential “litigation gridlock”. Mr. Laurence was also criticized for filing material “without limit”, demanding irrelevant disclosure from his wife, and “stubbornly refusing” to reciprocate in the disclosure department. In a final shot, the Court noted that Ms. Bridge had refused payment, but foolishly expended over $200,000 on legal fees:

“The parties seem determined to pay their lawyers to fight about almost every aspect of issues that should have been resolvable well before now.”

Ms. Bridge earned a law degree but had retrained and worked as a school teacher earning $111,000 per year. In the two preceding years her husband’s company earned $1 million dollars in annual income. The Court held that:

“Need is relative. Interim spousal support is intended to preserve the accustomed lifestyle of the support recipient pending the trial. Both parties live frugally despite their wealth. As a consequence, the evidence does not show that the applicant has accumulated significant debt since separation. Nor has she been required to significantly liquidate her assets. On the other hand, during the same period, the respondent has continued to accumulate wealth.”

Ultimately, the Court ordered Mr. Laurence to pay a dividend of $360,000 to his wife and to pay himself a $1 million dollar dividend, if he so chose. The remaining dividend of $640,000 would be held in escrow pending the trial or settlement of the family dispute. In addition, Ms. Bridge would receive $300,000 in lump sum interim spousal support, payable in 90 days, an amount easily payable by Mr. Laurence from his dividend cheque or other funds.

Ms. Bridge’s claim for $12,544 a month in interim spousal support and $350,891.00 in retroactive support was dismissed.

This is yet another case where money, energy, and time is wasted which could be better spent working with a tax specialist/accountant to craft a division of corporate property beneficial to both parties, accompanied by a determination of the income status of each party after the pie is divided. Only then can there be a proper analysis of the need or not, for spousal support.

Lawdiva aka Georgialee Lang

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

BarristerIt 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

How to Ensure Your Family Court Judge Will Rule Against You….

GeorgiaLeeLang025Family law is incredibly emotional, particularly when it comes to parenting and children’s issues. But there are basic “rookie” mistakes that well-meaning moms and dads make, despite their valiant efforts to present themselves as good parents focused on their children’s best interests.

One of those mistakes is surreptitiously recording your children or your separated spouse.

So many Canadian judges have criticized this practice that it is almost trite law that it should be avoided. For example, Ontario Justice Pazaratz says in Whidden v. Ellwood, 2016 ONSC 6938

“Parents shouldn’t surreptitiously audio record their children. It’s a breach of trust; an abuse of access; and a cheap manipulation of an innocent child. Sheidaei-Gandovani v. Makramati, 2014 ONCJ 82 (CanLII), 2014 ONCJ 82 (OCJ); Hameed v. Hameed, 2006 ONCJ 274 (CanLII), 2006 ONCJ 274 (OCJ); Jackson v. Mayerle, 2016 ONSC 72 (CanLII), 2016 ONSC 72 (SCJ)”.

A British Columbia judge wrote:

“I am of the opinion that it is not desirable to encourage the surreptitious recording of household conversations, particular so when it is done in the family home and the conversations are between family members. This is an odious practice.” (Seddon v. Seddon 1994 BCSC 1062)

The rationale for filming your child during a parenting exchange time is usually done to show one of the following behaviours:

a) The child’s unwillingness to go to the other parent;
b) The child’s eagerness to go to the other parent;
c) The opportunity to present evidence of the other parent’s nastiness, bad language, late arrival, abusive behaviour, etc.

Yes, you will find judges who will admit audio/video recordings into evidence, but the general consensus is that they are rarely useful or necessary for a judge to determine how to determine custody or divide parenting time between parents.

Why do judges dislike audio or video recordings? Because:

a) Parents use recordings to make the other parent look bad, but more often then not it backfires, causing the Court to doubt the judgment of the recording parent;

b) Recording your child or spouse raises doubts about how a fit parent could be so insensitive as to place an innocent child in the middle of an inflammatory situation;

c) The clear message to the child is “Look how bad your mother/father is, so much so that I have to record him/her”.

And yet, clients will continue to ignore the good advice they receive from their lawyers and smartphones will continue to be a part of a warring parent’s arsenal…sad but true.

Lawdiva aka Georgialee Lang

Courtrooms Flooded with Litigants With No Lawyers

GEO CASUALIt’s not getting any easier to be a judge these days, as self-represented litigants continue to overwhelm Canadian courts in increasing numbers.

With the abolition of Legal Aid and a middle-class that can’t afford to hire lawyers, the situation has become dire.

University of Windsor law professor Julie MacFarlane’s research indicates that up to 80% of court users in family law go into court without a lawyer.

The popular cliché that people who represent themselves in court have fools for clients has never been more true, and despite the increasing availability of pro bono legal services, rarely does free legal advice mean that a lawyer will show up in court.

While it is lawyers that have the reputation for talking too much and wasting court time, the truth is that court cases with lay litigants take up many more court hours because rules of evidence and procedure, while somewhat relaxed for in-person litigants, must still be maintained to ensure due process and the integrity of our justice system.

In a recent court case, with no counsel, where the issue was whether a Pakistani divorce was authentic and legitimate, one judge said:

“I record that I began this case at 10.30 a.m. this morning and I am now concluding it around 3.30 p.m. It has, accordingly, effectively occupied the whole of the court day. By sheer good fortune, the other case which had been listed for hearing by me today was vacated [postponed] yesterday for reasons connected with its readiness. If that case had not been vacated, I, and the litigants in that case, would have been faced with very considerable difficulties and a severe shortage of court time, and probably also additional expenditure to the parties in that case who, as likely as not, would have to have returned on another day.”

The judge found that the divorce was valid, but was justice really served when he noted that he did not have any basic materials, no orderly bundle of relevant documents, no chronology, no case summaries, and no real argument.

Professor MacFarlane’s observation that “it’s the inmates who are running the asylum” is sadly apropos.

Lawdiva aka Georgialee Lang