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

The Difficulty of Ridding Your Case of a “Seized” Judge.

GeorgiaLeeLang100It is not unusual, especially in family law cases, to have a judge conclude a hearing with the phrase “I will seize myself of this case”. What that means is that the judge has decided that it is reasonable, necessary, or simply prudent for him or her to hear all future court applications regarding the case.

Often this is good news to the parties and their lawyers, but other times it is a fate that is not welcomed.

Madam Justice Martinson in AA v. SNA 2009 BCSC 387 explained the rationale behind a judge seizing herself of a case:

“[77] It is imperative in high conflict family cases generally, and certainly in cases involving allegations of alienation like this one, that one member of the Court take charge of the case. Having a single judge hear cases is required by s. 14 of the Supreme Court Act:

(1) All proceedings in the court and all business arising from those proceedings, if practicable and convenient, must be heard, determined and disposed of before a single judge.

(2) All proceedings subsequent to the hearing or trial including the final order, except as otherwise provided, and on a rehearing must, if practicable and convenient, be before the judge before whom the trial or hearing took place.

[78] The reasons for doing so for all cases are obvious. The judge will be familiar with the case so the litigants do not have to explain the situation over and over again. It avoids “judge shopping” to try to get a better result. It prevents inconsistent approaches. It saves legal and other costs. There will be times in dealing with some cases when it is not convenient or practical to do so.”

In cases like the latter, judges often seize themselves with the proviso that if the matter is urgent and they are not readily available, then another judge can hear the case.

But often one party, usually the party who consistently “loses”, alleges bias and seeks to rid the case of the seized judge. Recently, the British Columbia Court of Appeal in NRG v. GRG 2017 BCCA 407 weighed in on this topic saying:

“There is much wisdom in Madam Justice Martinson’s observation that a family unit may benefit from a judge seizing him or herself of a case. That does not mean, however, that the seized judge should remain seized to the last application filed. The very fact the judge is seized of the case increases the opportunity to develop an impermissible point of view about the case or the parties, and emphasizes the vital requirement of assiduous objectivity. All trial judges will know there may come a time in the conduct of a case when the judge says, “I have done my best and should pass this to fresh eyes.” In our respectful view, this may be such a time.”

The Appeal Court noted that while the appellant sought an order from the appellate panel reversing the Supreme Court judge’s “seizure” proclamation, the Court observed they lacked jurisdiction to overturn the seizure, not wishing to interfere with the lower court’s process, and also did not characterize it as an order of the court. They suggested that a litigant must appear before the seized judge or the Chief Justice of the Supreme Court to obtain such a direction.

Frequently, a complaint against a judge who has seized himself is accompanied by an application requesting a judge to remove himself from a case based on a reasonable apprehension of bias, another application that must go before the judge in question and is most commonly dismissed.

I remember a case many years ago where I drew what I believed to be an “unfavourable” judge and convinced opposing counsel to adjourn the case so that settlement discussions could ensue. When we advised the court we were adjourning by consent, the clever judge declared that he would be seized of the case, despite hearing no evidence at all. It was clear he figured out that the adjournment was an escape from his courtroom…and he was right!

Lawdiva aka Georgialee Lang

Not Ready for Trial? Ontario Court Says Too Bad….

GeorgiaLeeLang057An Ontario judge has spoken out clearly about counsel who book trials and then abandon them on short notice to the courts. In Armstrong v. Armstrong, 2017 ONSC 6568, Mr. Justice Pazaratz called the case, involving a reduction or termination of spousal support, only to learn that the litigants in the case were not available, and an adjournment was sought by both counsel.

Counsel had earlier agreed and the court permitted them to adjourn the trial, then set for August 2017. At that hearing, counsel had agreed the trial would proceed in October 2017 for three days.

Counsel advised the court that an error had occurred and their clients incorrectly believed the rescheduled trial would take place in January 2018. Counsel also stated that a settlement conference had not been booked which might assist the parties to settle. As well, one of the lawyers indicated he had a doctor’s appointment that afternoon. Judge Pazaratz queried counsel as to why a trial was booked if settlement had not yet been explored, and also opined that the court would and could work around counsel’s medical appointment, but that did not justify an adjournment of the trial. He also said:

“The implications of attending court on day one of a three day trial and requesting an adjournment go far beyond merely wasting one day of court time. Judges and trials are scheduled based on a balancing of multiple scheduling considerations. If this three day time slot becomes wasted, there may be far-reaching consequences (for example another three day trial could have been called, but if I am only available for two more days this week, it means I don’t have enough time to deal with that other matter).”

Judge Pazaratz advised counsel to get their clients to court immediately so the matter could proceed unless a settlement was reached, and warned them that if the matter was not settled and the trial did not go ahead, he would dismiss their case.

Counsel returned with a consent order in which each party withdrew their claims on a without prejudice basis, however, the Court was not impressed with counsels’ tactics saying:

“The problem, of course, is that if people can simply withdraw claims when they aren’t ready for trial, there’s nothing to stop them from re-commencing those claims in short order, and creating even further stress and expense for the system. We have an obligation to ensure that judicial resources are appropriately utilized and not misused. I am not prepared to allow the parties to simply withdraw their claims on a without prejudice basis.”

Judge Pazaratz then dismissed the claims, but not on the merits, saying that if either party wished to return to court to deal with any of the claims, they would require permission from the Court to proceed, and that in the event that occurred, he would be the judge dealing with the matter.

Where courts are being criticized for a lack of judicial time and unreasonable delays in meting out justice, Judge Pazaratz’s ruling is a welcome response to counsel who abuse the system. While “courthouse steps” settlements are to be encouraged, in this case it was apparent from counsels’ remarks that settlement had not yet been broached; that no trial preparation had been undertaken; and that counsel were content to show up, without their clients, expecting a favourable or neutral response to their self-imposed dilemma.

Lawdiva aka Georgialee Lang

Switching Counsel: A Good Idea or Not?

_DSC4179 - Version 2How important is it to stick with the lawyer you originally retained? Not an easy question to answer, but clearly, changes in representation can be detrimental to a litigant.

There are, of course, cases where a change is beneficial. For example, where a client and a lawyer’s personalities clash continually, that may signal a needed change. However, what often happens in family law cases is that counsel will bring an application on behalf of a client with results that are less than expected, leading the client to blame the lawyer for the disappointing result.

If the result is because of a lack of preparation on the lawyer’s part, the client may consider that a change is necessary, but often a disappointing result is because the facts of the case do not support the outcome sought by counsel. If that is the case, clients should be advised in writing of the chances of success.

Sometimes a less than stellar result is because of a particular judge. Experienced counsel get to know a judge’s attitude toward a particular type of argument or client and will avoid that judge when arguing certain cases, although it is not always easy to do so.

In a recent case in California ex-Spice Girl, X Factor and America’s Got Talent coach, Mel B’s divorce from Stephen Belafonte has garnered salacious headlines, but the latest media coverage concerns her switching counsel just before her trial scheduled to commence on November 6.

The reason for her change in counsel is unknown, but media reports indicate that she abruptly walked out of her recent deposition and was later ordered by a judge to reappear and continue that discovery process.

While the trial has previously been adjourned it is expected that her new counsel will try to obtain a further delay of the trial. It has been reported that the 42-year-old has already spent a million dollars in the seven months since her divorce litigation began. A truly ugly case that may well get worse….