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

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Zealous Advocacy or Abuse of Process?

GEO CASUALThis week two Vancouver lawyers were excoriated by a Supreme Court Justice because of the tactics they employed in a case involving the proposed adoption of a young Metis child, referred to as SS. (A.S. v. British Columbia (Director Of Child, Family and Community Services),2017 BCSC 1175)

Lawyer JH represented foster parents who were desperate to retain custody and adopt the young child, while lawyer NG represented the biological parents, who supported the claims of the Metis foster parents. Their mutual nemesis was the Director of the Ministry of Child, Family and Community Services who determined the child, born in 2013, should be placed for adoption with a non-Metis Ontario family who had already adopted the child’s two siblings.

The court battle was hard fought involving multiple and duplicate actions and subsequent appeals, however, the lynchpin of Madam Justice Fisher’s damning findings against lawyer JH centered on a settlement letter JH sent to the Ministry, threatening to disclose a recording of an interview between Ministry social workers and the child which he said would show that the social workers had perjured themselves in their evidence in court. HH wrote:

“This is critical information which should be made available to Madam Justice Dickson, the panel hearing the appeal, and every subsequent Justice hearing any further matter in these and all related proceedings. Should the contested litigation continue, appropriate sanctions may be appropriate against the 3 social workers and the Director.

I have instructions from my clients, counsel for the birth parents, and the President of the BC Metis Federation, that if the Director is prepared to consent to my clients adopting S.S. by 10:00 a.m. this Wednesday, September 7, 2016, my clients, the birth parents and the BC Metis Federation are prepared to discontinue all legal proceedings, with the exception, of course, of the finalization of the adoption, and will enter into comprehensive releases involving all of the parties with respect to any and all possible legal outstanding matters.”

Despite repeated requests by the Ministry, JH refused to produce the alleged tape, a tape that if it existed was of questionable origin since the social workers had not recorded the meeting. If a recording existed it could only have been done surreptitiously by the unwitting child.

Madam Justice Fisher found that JH and NG had become blinded by their zeal to obtain custody for the foster parents ignoring that the Ministry could only settle the case if it was in the child’s best interests. To accept JH’s proposal would be a dereliction of their duty to act only in the best interests of their wards. A settlement to avoid scandal, the purported perjury, would be unconscionable. Madam Justice Fisher characterized JH’s conduct as a form of blackmail.

Lawyer NG was chastised for an email he sent accusing a Ministry lawyer of conduct that was “totally outrageous”,”totally unreasonable” and of a pattern of behaviour that showed “utter disrespect for the Court and to counsel”. He then threatened to report the alleged misconduct to the Law Society of British Columbia, apparently forgetting that while counsel may report another lawyer’s conduct, it is inappropriate to threaten to do so. One reports or not, but threats to report are sacrosanct.

The Court found that the lawyers’ conduct, which also included advancing inconsistent versions of their clients’ claims and unreasonable delay tactics was worthy of rebuke in the form of an order that each pay special costs to the Ministry for their egregious conduct, a rare sanction from the court. It is commonplace to order that a litigant pay costs but to order a lawyer to be responsible personally for costs is highly unusual and it is even scarcer to see a judge order special costs, which is typically 90% of the actual costs of the litigation.

The Reasons in this case illustrate that while lawyers should advance every legitimate argument in favour of their client, if they become enmeshed in their client’s cause they may lose objectivity and the perspective required of them. Following a client’s instructions will not protect an overzealous lawyer who is expected to control heated litigation as both an effective advocate and an officer of the court.

It is important to note that both JH and NG retained lawyers to represent them at the hearing where special costs were imposed and I predict that each lawyer will appeal the ruling of Madam Justice Fisher.

Lawdiva aka Georgialee Lang

When Will Our Judges Speak Out Forcefully Against Perjury?

_DSC4851In yet another British Columbia family law decision, the court fails to denounce, in the strongest terms, a litigant whose testimony is rife with lies. Yes, this judge addresses credibility, but in the same anemic way that permeates most family law cases, namely ” I accept the evidence of the claimant where it differs from the evidence of the respondent.”

That’s it, no rebuke, no censure, not even an award of special costs, despite the litigant’s devious conduct requiring untold extra preparation and court time to present a narrative that is flagrantly false, requiring a robust defence….yes, a rebuttal to a pack of lies.

Ngo v. Do 2017 BCSC 83 focuses on the breakdown of the marriage of a Vietnamese couple who agreed they married and immigrated to Canada in 1994. From that point on the parties’ evidence is sharply divergent.

He said their marriage ended two years later, in 1996, while she maintained they lived together as husband and wife in the family home in East Vancouver until their separation in 2012. When asked where he lived after 1996, since he alleged he did not live with his wife and children,  he was unable to provide a single address, except to say that he lived in East Vancouver with a friend.

When asked to explain how it was that he and his wife added three additional children to their union after his alleged departure in 1996, he acknowledged that despite the shattering of the bonds of matrimony, they remained intimate with one another.

The date of separation was critical to a determination of the wife’s interest in two homes, a crab boat, and a license to catch crab. Ms. Ngo testified their first home was purchased in 2000 and became the family home where she and her husband raised the children, for all but one year of their marriage.  She believed the home was registered in her husband’s name. Not so, said Mr. Do. He testified that the home’s owner was Mr. Den Van Ta, who he said he barely knew, although he had earlier said Den Van Ta was”like a brother” to him.

A second home in Maple Ridge was purchased in 2004, however, Mr. Do said it was purchased by his cousin, Kevin Phan. He testified that he lived with the children in the home from 2004 to 2008 rent-free and that Ms. Ngo was not permitted to live there. Ms. Ngo gave evidence that her husband told her the second home was rented out, but in 2006 he moved the family to the second home for a year, advising her that it was a more convenient location to travel to his employment in Maple Ridge.

Eventually the Maple Ridge home was registered in Mr. Do’s name. He explained that his cousin took pity on him and gifted the property to him in 2007. However, land title documents described the transaction as a cash sale for $445,000, subject to his cousin’s existing mortgage. Mr. Do sold the Maple Ridge home in 2009 netting $145,000 in profit.

Mr. Do’s lucky streak continued. He advised the court that the first home in East Vancouver was later gifted to him by Mr. Den Van Ta. The statement of adjustments described the transfer as a “gift of equity from the seller to the buyer in the amount of $269,000.” He also purchased a vessel and crab license sharing the cost equally with Mr. Den Van Ta, who, no surprise here, later gifted his one-half interest in their crab business to Mr. Do, gratis, for free.

The parties’ two eldest children corroborated Ms. Ngo’s evidence, while Mr. Den Van Ta was called to back up Mr. Do’s version of events with respect to the first home and the crab business. He was less than impressive. Mr. Phan was not called to testify leaving the court to draw an adverse inference.

The outcome? Mr. Do’s evidence was rejected and all the family property was shared equally. However, nowhere does the court suggest that Mr. Do’s perjured testimony is an abuse of process or of such a character as to bring the administration of justice into disrepute. Can anybody reason why Ms. Ngo was not awarded special costs, which is a full reimbursement of every penny she paid to her lawyer to respond to her husband’s pernicious lies? The court’s apparent trivialization of perjury by failing to award  special costs to Ms. Ngo sends a strong message to litigants that perjury is acceptable.

Pulitzer prize-winning author James B. Stewart succinctly writes in “Tangled Webs: How False Statements are Undermining America”: “Our judicial system rests on an honor code: “I swear to tell the truth, the whole truth and nothing but the truth.” Perjury is not acceptable behaviour.”

Lawdiva aka Georgialee Lang

Husband Ordered to Pay His Wife For His Outrageous Behavior

DSC00507 (2)It happens far too often in family law…a marriage breakdown that should and could be resolved, turns into scorched earth litigation.

Case in point: Madam Justice Watchuk in British Columbia’s Supreme Court walloped a litigant for his reprehensible behavior, ordering him to pay $35,000 to his wife. His over-the-top antics included rude, nasty, demeaning, and inflammatory language directed against his former wife, his wife’s lawyer and the court process itself, during a nineteen-day custody trial.

The usual rule in litigation is that the losing party must pay “costs” to the winning party. Costs are not, however, a reimbursement of the successful party’s legal fees, rather they are a contribution to them, usually amounting to about one-third.

In this case the judge ordered the father to pay “special costs”. These costs are intended to punish a litigant for outrageous or reprehensible behavior before the trial or during the court process.

What seemed to escape this belligerent litigant is that no judge will award shared parenting to an individual who is so out-of-control that he cannot rein in his rage in the face of the court.

Yes, there are litigants whose attitude and behavior is despicable, but they are smart enough to clean up their act by the time they get to court, as if butter couldn’t melt in their mouth. Often times these narcissistic creeps fool the court into believing they are the ones who have been abused.

What is common in these cases is that by the time the trial begins, they have alienated any lawyer who had the misfortune to try to assist them. As well, some percentage of these types of litigant don’t want a lawyer because they believe that acting in person allows them greater freedom to harangue, harass, and obfuscate the issues.

Unfortunately, many of these reprobates simply ignore court orders and it would not surprise me if this woman never sees the money she has been awarded, particularly because the fellow in this case spent a lot of his time in the United Kingdom.

But, you may say, once the trial is done, it’s over? Not so fast…these litigants often appeal the trial court’s decision and for good measure, often report their spouse’s lawyer to the Law Society alleging unfounded unethical conduct.

Wise words to family law lawyers: Run as fast as you can when you see this kind of client. It is never worth it…

Lawdiva aka Georgialee Lang