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

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

$500,000 Custody Case Garners Harsh Criticism

 

Another day…another courtroom, but the same insanity…. a custody battle that has cost two parents $500,000 in legal fees. This time it’s an exasperated Ontario Superior Court judge from Hamilton who asks the question, “How does this keep happening? What will it take to convince angry parents that nasty and aggressive litigation never turns out well?”

Mr. Justice Alex Pazaratz presided over a 36-day trial, awarding sole custody of an 8-year-old child to her father, a Toronto police officer. The Court’s Reasons for Judgment begin with the recitation of an email sent by the husband to his wife, a year after their separation, and before litigation commenced:

“We are both reasonable people and I really think we can work this out without spending $40,000 to $50,000 a piece in lawyer fees only to have a judge tell us something we could arrange ourselves. Please I’m begging you to be reasonable.”

It only takes one parent to turn a family law case into a hellish nightmare, and according to Judge Pazaratz that’s what an angry, foolish woman did. Consider the optics: Father wants generous parenting time, and mother refuses, turning the child against her father. In these situations, fathers will get nowhere unless they ask a court to intervene. At this point, most right-thinking parents would instruct their lawyers to negotiate a parenting plan, or attend mediation, with the goal of maximizing each parent’s time with the children, focusing always on the child’s best interests.  Sound so simple, doesn’t it?

In this case, dad spent $300,000, while mom spent $200,000. Judge Pazaratz said:

“Pause for a moment to consider the overwhelming tragedy of this case,…These are nice, average people. Of modest means (now considerably more modest). They drive old cars and probably pinch pennies shopping at Costco.”

The harshest criticism was leveled at the child’s mother, who the Court found had manipulated and falsified evidence, engaged in provocative and dangerous behaviour, and poisoned the child against her father. Judge Pazaratz described her conduct as “emotional child abuse… with their only child caught in the cross-fire”. Her deviant behaviour was triggered when her estranged husband began to move on with his life and began a new relationship.

The Court ordered the mother to pay costs to the father in the amount of $192,000, wryly concluding:

“In retrospect, (the father’s) sombre warning about ‘spending $40 – $50,000 a piece in lawyer fees’ now amounts to wishful thinking.”

Lawdiva aka Georgialee Lang